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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☑
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Smaller reporting company
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Emerging growth company
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Class A Common Stock par value $0.01 per share
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—
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Class B Common Stock par value $0.01 per share
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—
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Page
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•
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Strong and growing presence in major live entertainment markets through:
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◦
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A portfolio of world-renowned venues;
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◦
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Marquee live entertainment brands and content; and
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◦
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Globally recognized brands in entertainment dining and nightlife.
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•
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Deep industry relationships that drive top-tier performers and a wide variety of events to the Company’s venues;
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•
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Proven track record of delivering significant value for partners through innovative sponsorships and premium hospitality;
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•
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Reputation for world-class customer experience driven by decades of expertise in sales and marketing, and venue operations;
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•
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Expertise in utilizing data to drive decisions to maximize revenue and the guest experience;
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•
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Established history of successfully planning and executing comprehensive venue design and construction projects;
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•
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Long-term agreements to host home games at
The Garden
for two of the most recognized franchises in professional sports — the
Knicks
and the
Rangers
; and
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•
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A strong and seasoned management team.
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•
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A unique strategy for our performance venues.
The Company has a collection of iconic performance venues through which we deliver live entertainment and sporting events. This portfolio includes The Garden,
Hulu Theater at Madison Square Garden
, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. These venues, along with our
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◦
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Maximizing the live entertainment experience for our customers.
We use our first-class operations, coupled with new innovations and our ability to attract top talent, to deliver unforgettable experiences for our guests — whether they are first-time visitors or repeat customers — ensuring they return to our venues. We have a track record of designing world-class facilities that exceed our customers’ expectations. This includes our renovations of
The Garden
, Radio City Music Hall, the Beacon Theatre and the Forum arena in Inglewood, California (which the Company sold in May 2020) to deliver top-quality amenities such as state-of-the-art lighting, sound and staging, a full suite of hospitality offerings and enhanced premium products. In addition to better on-site amenities, we continue to explore new ways to utilize technology to improve the customer experience and create communities around our live events. From the way our customers buy their food and beverage; to how we market and process their tickets; to the content we provide them to enhance their entertainment experience, we strive to give our customers the best experience in the industry. For example, we survey thousands of guests annually across our venues to collect data on how we can better optimize their experience. Our commitment to exceptional service and innovation will be elevated even further with the introduction of
MSG Sphere
— a venue that is being built, from the ground up, to deliver an entirely new guest experience through the use of advanced, cutting-edge architectural, visual and audio technologies that will create a fully immersive and customized entertainment experience. See “— Our Business — Our Performance Venues — MSG Sphere” for a description of the key design features of
MSG Sphere
that we believe will deliver this entirely new guest experience.
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◦
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Leveraging our live entertainment expertise to increase productivity across our performance venues.
Part of what drives our success is our “artist first” approach, which has created significant growth at our venues over our history. Through dedicated artist areas and top-tier service, this talent-friendly environment not only attracts artists to our venues, but also brings them back for repeat performances. We will continue to use our “artist first” approach to attract the industry’s top talent with the goal of increasing utilization across all our venues through more multi-night and multi-market concerts and other events, including more recurring high-profile shows that help expand our base of events. Examples of this strategy include our residencies, which feature legendary performers playing our venues each month, and have included Billy Joel at The Garden and Jerry Seinfeld at the Beacon Theatre.
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◦
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Selectively expanding our performance venues in key music and entertainment markets.
We believe our proven ability to deliver entertainment-focused venues, coupled with our unique capabilities, technologies and “artist first” approach, can deliver a differentiated experience for artists, fans and partners. In February 2018, we unveiled our vision for
MSG Sphere
, along with our plans to build these state-of-the-art venues in Las Vegas and London.
MSG Sphere
venues will be the first large-scale venues to combine cutting-edge technology and multi-sensory storytelling to deliver fully immersive experiences. Because of the transformative nature of these venues, we believe there will be other markets — both domestic and international — where
MSG Sphere
can be successful. The design of
MSG Sphere
will be flexible to accommodate a wide range of sizes and capacities — from large-scale to smaller and more intimate — based
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•
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An innovative approach to marketing and sales.
Our Company possesses powerful and attractive assets able to deliver significant exposure for marketing partners who share our vision of creating brand new experiences and innovative opportunities to engage with audiences. We also benefit from being part of a broader entertainment and sports offering as a result of our various agreements with
MSG Sports
and MSG Networks, through which the Company offers an integrated approach to marketing partnerships and corporate hospitality solutions to drive sponsorship, signage and suite sales.
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◦
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Delivering unrivaled exposure for our partners.
Our assets are highly sought after by companies that value the popularity of our venues and brands, which include The Garden — The World’s Most Famous Arena — as well as Radio City Music Hall’s cherished holiday tradition, the celebrated
Christmas Spectacular
production. Utilizing these powerful platforms, we collaborate with companies to create elevated experiences that showcase their brands in meaningful ways. With the debut of MSG Sphere, we expect the value proposition for our partners to continue to expand as we introduce unprecedented opportunities for them to connect with our guests. MSG Sphere in Las Vegas will feature cutting-edge technology capable of delivering innovative activations. For example, the venue will feature an exterior covered in fully-programmable LED, creating a digital showcase for brands, events and partners.
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◦
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The Company also offers a wide array of premium corporate hospitality offerings that cater to a variety of audiences. For example, The Garden has a range of suite and club products, including 21 Event Level suites, 58 Lexus Madison Level suites, 18 Signature Level suites, the Madison Club, Suite Sixteen and the Loft Club. These suites and clubs - which provide exclusive private spaces, first-class amenities and some of the best seats in The Garden - are primarily licensed to corporate customers with the majority being multi-year agreements, most of which have annual escalators. We believe the unique combination of our entertainment offerings and MSG Sports’ premium live sporting events, along with the continued importance of corporate hospitality to our guests, position us well to continue to grow this business. And as the Company’s expansion plans progress, our MSG Sphere venues will deliver additional hospitality options in other major markets.
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◦
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Understanding our customers.
We continue to forge deep direct-to-consumer relationships with customers and fans, with a focus on understanding how consumers interact with every aspect of the Company. A key component of this strategy is our large and growing proprietary database of millions of customers, which drives revenue and engagement across our events, benefiting the Company through ticket sales and sponsorship activation. This database provides us with an opportunity to tailor offerings and cross-promote our products and services, introducing customers to our wide range of assets and brands.
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•
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A growing portfolio of proprietary content.
We continue to explore the creation of proprietary content — including the development of attraction-like shows for our existing and planned venues — that enables us to benefit from being both content creator and venue operator. Content development will ultimately give us greater control over the utilization of our venues, making us less reliant on touring schedules. The Company is supporting this strategy with the creation of MSG Sphere Studios, a creative studio that brings together expertise from across the entertainment industry. The Company is also developing a set of tools specifically for MSG Sphere that makes content creation for this powerful platform an intuitive experience and maximizes the potential of the venues’ immersive technologies - whether someone is adapting existing content or developing original creations. The Company expects to collaborate with third-party creators and to also develop its own catalogue of unique and compelling material that can be used across MSG Sphere venues. This will range from original attractions, purpose-built for MSG Sphere, to the establishment of a dynamic library of content that can be used by artists or third parties who want to bring their experiences to life — whether for concerts, residencies or corporate events. The Company’s creation of new proprietary content will also include exploring opportunities for our world-renowned entertainment brand — the Radio City Rockettes.
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•
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Utilizing our world-class hospitality expertise.
The Company owns a controlling interest in
Tao Group Hospitality
— a leader in the hospitality industry.
Tao Group Hospitality
operates
28
entertainment dining and nightlife venues in New York City, Las Vegas, Los Angeles, Chicago, Singapore and Sydney, Australia with widely recognized brands that include: Tao, Marquee, Lavo, Avenue, Beauty & Essex and Cathédrale. Tao Group Hospitality is actively developing opportunities in select markets — both domestically and internationally — to expand. Since September 2018, Tao Group Hospitality has opened Tao Chicago, along with new entertainment dining and nightlife venues as part of the Moxy Chelsea and Moxy East Village hotels in New York City.
Tao Group Hospitality
also debuted three new venues in Singapore — Marquee, Avenue, and KOMA. In addition to its expansion plans,
Tao Group Hospitality
has become a valuable strategic partner for the Company. This includes at The Garden, where
Tao Group Hospitality
is playing a larger role in our food and hospitality offerings, as well as in Las Vegas, where it has a 15-year history in the market and will help to create a world-class guest experience for MSG Sphere.
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•
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A fully-programmable LED exterior and an interior bowl that features the world’s largest and highest resolution LED screen known today — more than 160,000 square feet of display surface;
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•
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An advanced acoustics system featuring beamforming technology that will deliver crystal clear audio;
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•
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An infrasound haptic system that will use deep vibrations so guests can “feel” the experience; and
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•
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An advanced architecture for connectivity that will enable a broader range of content, greater interaction among guests and more immersive entertainment experiences.
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•
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laws and policies affecting trade and taxes, including laws and policies relating to currency, the repatriation of funds and withholding taxes, and changes in these laws;
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•
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changes in local regulatory requirements, including restrictions on foreign ownership;
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•
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exchange rate fluctuation;
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•
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exchange controls, tariffs and other trade barriers;
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•
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differing degrees of protection for intellectual property and varying attitudes towards the piracy of intellectual property;
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•
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foreign privacy and data protection laws and regulations, such as the E.U. General Data Protection Regulation, and changes in these laws;
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•
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the impact of Brexit, which legally took place on January 31, 2020, and any agreements reached during the transition period in effect until December 31, 2020;
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•
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the instability of foreign economies and governments;
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•
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war, acts of terrorism and the outbreak of epidemics or pandemics abroad;
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•
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anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act and the U.K. Bribery Act that impose stringent requirements on how we conduct our foreign operations, and changes in these laws and regulations; and
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•
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shifting consumer preferences regarding entertainment.
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•
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entering into any transaction pursuant to which 50% or more of our shares or assets would be acquired, whether by merger or otherwise, unless certain tests are met;
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•
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issuing equity securities, if any such issuances would, in the aggregate, constitute 50% or more of the voting power or value of our capital stock;
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•
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certain repurchases of our common shares;
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•
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ceasing to actively conduct our business;
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•
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amendments to our organizational documents (i) affecting the relative voting rights of our stock or (ii) converting one class of our stock to another;
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•
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liquidating or partially liquidating; and
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•
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taking any other action that prevents the
Entertainment Distribution
and certain related transactions from being tax-free.
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•
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Class A Common Stock, par value $0.01 per share (“
Class A Common Stock
”), which is entitled to one vote per share and is entitled collectively to elect 25% of our Board of Directors; and
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•
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Class B Common Stock, par value $0.01 per share (“
Class B Common Stock
”), which is entitled to 10 votes per share and is entitled collectively to elect the remaining 75% of our Board of Directors.
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•
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the authorization or issuance of any additional shares of Class B Common Stock; and
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•
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any amendment, alteration or repeal of any of the provisions of our certificate of incorporation that adversely affects the powers, preferences or rights of the Class B Common Stock.
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Base Period 4/20/20
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4/30/20
|
5/31/20
|
6/30/20
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|||||||||||||
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Madison Square Garden Entertainment Corp.
|
$
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100.00
|
|
$
|
126.59
|
|
$
|
121.28
|
|
$
|
114.80
|
|
||||
|
Russell 3000 Index
|
100.00
|
|
103.71
|
|
109.26
|
|
111.76
|
|
||||||||
|
Bloomberg Americas Entertainment Index
|
100.00
|
|
112.72
|
|
133.43
|
|
123.07
|
|
||||||||
|
|
Years Ended June 30,
|
||||||||||||||
|
|
2020
(d)(e)
|
2019
(d)
|
2018
|
2017
|
|||||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||
|
Operating Data
(a)
:
|
|||||||||||||||
|
Revenues
|
$
|
762,936
|
|
$
|
1,048,909
|
|
$
|
988,990
|
|
$
|
711,022
|
|
|||
|
Net income (loss)
|
$
|
(14,687
|
)
|
$
|
(30,138
|
)
|
$
|
1,887
|
|
$
|
(112,611
|
)
|
|||
|
Less: Net loss attributable to redeemable noncontrolling interests
|
(30,387
|
)
|
(7,299
|
)
|
(628
|
)
|
(4,370
|
)
|
|||||||
|
Less: Net income (loss) attributable to nonredeemable noncontrolling interests
|
(1,534
|
)
|
(4,945
|
)
|
(4,383
|
)
|
304
|
|
|||||||
|
Net Income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
17,234
|
|
$
|
(17,894
|
)
|
$
|
6,898
|
|
$
|
(108,545
|
)
|
|||
|
Basic earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
0.72
|
|
$
|
(0.75
|
)
|
$
|
0.29
|
|
$
|
(4.52
|
)
|
|||
|
Diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
0.72
|
|
$
|
(0.75
|
)
|
$
|
0.29
|
|
$
|
(4.52
|
)
|
|||
|
Weighted-average number of common shares outstanding
(b)
:
|
|||||||||||||||
|
Basic
|
23,998
|
|
23,992
|
|
23,992
|
|
23,992
|
|
|||||||
|
Diluted
|
24,017
|
|
23,992
|
|
23,992
|
|
23,992
|
|
|||||||
|
Balance Sheet Data
(a)
:
|
|||||||||||||||
|
Total assets
|
$
|
3,719,206
|
|
$
|
3,315,759
|
|
$
|
3,287,771
|
|
$
|
3,271,497
|
|
|||
|
Long-term debt (including current portion), net of deferred financing costs
(c)
|
33,555
|
|
54,598
|
|
105,700
|
|
105,433
|
|
|||||||
|
Total Madison Square Garden Entertainment stockholders’ equity / divisional equity
|
2,841,637
|
|
2,572,048
|
|
2,478,113
|
|
2,442,418
|
|
|||||||
|
(a)
|
Beginning in Fiscal Year 2017, operating and balance sheet data includes the results of
Tao Group Hospitality
operating information from February 1, 2017 to March 26, 2017. Beginning in Fiscal Year 2018, operating and balance sheet data includes the results of Obscura Digital (“
Obscura
”) since the acquisition date of November 20, 2017. For Fiscal Year 2020, the Company’s results of operations have been, and continue to be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues. See “
Item
7
.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
— Introduction —
Impact of the
|
|
(b)
|
On April 17, 2020 (the “Entertainment Distribution Date”),
23,992
shares of common stock were distributed to
MSG Sports
(formerly known as The Madison Square Garden Company) stockholders as of April 13, 2020. This share amount is being utilized for the calculation of basic and diluted earnings (loss) per share for both the years ended June 30, 2019 and 2018 and for period prior to April 17, 2020 in the year ended June 30, 2020 because Madison Square Garden Entertainment Corp. was a wholly-owned subsidiary of
MSG Sports
prior to the Entertainment Distribution Date.
|
|
(c)
|
Long-term debt presented above is net of debt issuance costs of
$832
,
$1,039
,
$3,613
, and
$4,567
as of
June 30, 2020
,
2019
,
2018
, and 2017 respectively. See “Item 8. Financial Statements and Supplementary Data —
Consolidated and Combined Financial Statements
—
Notes to Consolidated and Combined Financial Statements
— Note
13
.
Credit Facilities
” for more information.
|
|
(d)
|
The Company’s operating results for the years ended June 30, 2020 and 2019 were impacted by the adoption of ASC Topic 606. The Company used the modified retrospective method of adoption. Results for reporting periods beginning after July 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting guidance under ASC Topic 605. See “Item 8. Financial Statements and Supplementary Data —
Consolidated and Combined Financial Statements
—
Notes to Consolidated and Combined Financial Statements
— Note
4
.
Revenue Recognition
” for more information.
|
|
(e)
|
The Company’s operating results for the year ended
June 30, 2020
and balance sheet data as of
June 30, 2020
were impacted by the adoption of ASC Topic 842. The Company used the modified retrospective method of adoption. Upon adoption of this standard, the Company recorded initial operating right-of-use assets of
$259,840
, current operating lease liabilities of
$50,996
, and long-term operating lease liabilities of
$206,418
. The Company did not record any adjustment to retained earnings. See “Item 8. Financial Statements and Supplementary Data —
Consolidated and Combined Financial Statements
—
Notes to Consolidated and Combined Financial Statements
— Note
2
.
Summary of Significant Accounting Policies
—
Recently Issued Accounting Pronouncements
” for more information.
|
|
•
|
our ability to effectively manage the impacts of the COVID-19 pandemic and the government actions taken in response;
|
|
•
|
the level of our expenses and our operational cash burn rate, including our corporate expenses as a stand-alone publicly traded company;
|
|
•
|
our ability to successfully design, construct, finance and operate new venues in Las Vegas, London and other markets, and the investments, costs and timing associated with those efforts, including the impact of the temporary suspension of construction and any other construction delays and/or cost overruns;
|
|
•
|
the level of our revenues, which depends in part on the popularity of the
Christmas Spectacular Starring the Radio City Rockettes
(“
Christmas Spectacular
”) and other entertainment and sports events which are presented in our venues;
|
|
•
|
the level of our capital expenditures and other investments;
|
|
•
|
general economic conditions, especially in the New York City, Las Vegas, Chicago and London metropolitan areas where we have (or plan to have) business activities;
|
|
•
|
the demand for sponsorship arrangements and for advertising;
|
|
•
|
competition, for example, from other venues and other sports and entertainment options, including the construction of new competing venues;
|
|
•
|
changes in laws, guidelines, bulletins, directives, policies and agreements, and regulations under which we operate;
|
|
•
|
any economic, social or political actions, such as boycotts, protests, work stoppages or campaigns by labor organizations;
|
|
•
|
seasonal fluctuations and other variations in our operating results and cash flow from period to period;
|
|
•
|
the successful development of new live productions or attractions, enhancements or changes to existing productions and the investments associated with such development, enhancements, or changes, as well as investment in personnel, content and technology for the MSG Spheres;
|
|
•
|
business, reputational and litigation risk if there is a security incident resulting in loss, disclosure or misappropriation of stored personal information or other breaches of our information security;
|
|
•
|
activities or other developments (such as pandemics, including the COVID-19 pandemic) that discourage or may discourage congregation at prominent places of public assembly, including our venues;
|
|
•
|
the continued popularity and success of
Tao Group Hospitality
entertainment dining and nightlife venues, as well as its existing brands, and the ability to successfully open and operate new entertainment dining and nightlife venues;
|
|
•
|
the ability of Boston Calling Events, LLC (“BCE”)
to attract attendees and performers to its future festivals;
|
|
•
|
the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions;
|
|
•
|
our ability to successfully integrate acquisitions, new venues or new businesses into our operations;
|
|
•
|
the operating and financial performance of our strategic acquisitions and investments, including those we do not control;
|
|
•
|
the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in or acquire;
|
|
•
|
the impact of governmental regulations or laws, including changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions and the ability to maintain necessary permits or licenses;
|
|
•
|
the impact of any government plans to redesign New York City’s Pennsylvania Station;
|
|
•
|
a default by our subsidiaries under their respective credit facilities;
|
|
•
|
financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;
|
|
•
|
the ability of our investees and others to repay loans and advances we have extended to them;
|
|
•
|
our status as an emerging growth company;
|
|
•
|
the tax-free treatment of the
Entertainment Distribution
(as defined below);
|
|
•
|
our ability to achieve the intended benefits of the
Entertainment Distribution
;
|
|
•
|
the performance by
MSG Sports
of its obligations under various agreements with the Company related to the Entertainment Distribution and ongoing commercial arrangements;
|
|
•
|
lack of operating history as an operating company and costs associated with being an independent public company; and
|
|
•
|
the additional factors described under “Part
I
—
Item 1A.
Risk Factors
” included in this Annual Report on Form 10-K.
|
|
•
|
events at The Garden,
Hulu Theater at Madison Square Garden
, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre;
|
|
•
|
license fee payments under the Arena License Agreements;
|
|
•
|
sponsorships, suite licenses and in-venue advertising;
|
|
•
|
the 2020 production of the
Christmas Spectacular
; and
|
|
•
|
the 2020 Boston Calling Music Festival.
|
|
•
|
labor costs, consisting of restaurant management salaries, hourly staff payroll and other payroll-related items, including taxes and fringe benefits;
|
|
•
|
food and beverage costs;
|
|
•
|
operating costs, consisting of maintenance, utilities, bank and credit card charges, and any other restaurant-level expenses; and
|
|
•
|
occupancy costs, consisting of both fixed and variable portions of rent, common area maintenance charges, insurance premiums and taxes.
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2020
|
2019
|
Amount
|
Percentage
|
||||||||||||
|
Revenues
|
$
|
762,936
|
|
$
|
1,048,909
|
|
$
|
(285,973
|
)
|
(27
|
)%
|
||||
|
Direct operating expenses
|
508,122
|
|
670,641
|
|
(162,519
|
)
|
(24
|
)%
|
|||||||
|
Selling, general and administrative expenses (“SG&A”)
|
344,637
|
|
314,522
|
|
30,115
|
|
10
|
%
|
|||||||
|
Depreciation and amortization
|
104,899
|
|
109,343
|
|
(4,444
|
)
|
(4
|
)%
|
|||||||
|
Impairment for intangibles, long-lived assets, and goodwill
|
105,817
|
|
—
|
|
105,817
|
|
NM
|
|
|||||||
|
Gain on disposal of assets held for sale and associated settlements
|
(240,783
|
)
|
—
|
|
(240,783
|
)
|
NM
|
|
|||||||
|
Operating loss
|
(59,756
|
)
|
(45,597
|
)
|
(14,159
|
)
|
(31
|
)%
|
|||||||
|
Other income (expense):
|
|||||||||||||||
|
Earnings (loss) in equity method investments
|
(4,433
|
)
|
7,062
|
|
(11,495
|
)
|
NM
|
|
|||||||
|
Interest income, net
|
15,693
|
|
14,901
|
|
792
|
|
5
|
%
|
|||||||
|
Miscellaneous income (expenses), net
|
38,855
|
|
(6,061
|
)
|
44,916
|
|
NM
|
|
|||||||
|
Loss from operations before income taxes
|
(9,641
|
)
|
(29,695
|
)
|
20,054
|
|
68
|
%
|
|||||||
|
Income tax expense
|
(5,046
|
)
|
(443
|
)
|
(4,603
|
)
|
NM
|
|
|||||||
|
Net loss
|
(14,687
|
)
|
(30,138
|
)
|
15,451
|
|
51
|
%
|
|||||||
|
Less: Net loss attributable to redeemable noncontrolling interests
|
(30,387
|
)
|
(7,299
|
)
|
(23,088
|
)
|
NM
|
|
|||||||
|
Less: Net loss attributable to nonredeemable noncontrolling interests
|
(1,534
|
)
|
(4,945
|
)
|
3,411
|
|
69
|
%
|
|||||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
17,234
|
|
$
|
(17,894
|
)
|
$
|
35,128
|
|
NM
|
|
||||
|
Changes attributable to
|
Revenues
|
Direct
operating
expenses
(b)
|
SG&A
(c)
|
Depreciation
and
amortization
|
Impairment for intangibles, long-lived assets, and goodwill
|
Gain on disposal of assets held for sale and associated settlements
|
Operating
income (loss)
|
|||||||||||||||||||||
|
Entertainment segment
(a)
|
$
|
(211,850
|
)
|
$
|
(124,662
|
)
|
$
|
42,722
|
|
$
|
(2,716
|
)
|
$
|
—
|
|
$
|
(240,783
|
)
|
$
|
113,589
|
|
|||||||
|
Tao Group Hospitality segment
(a)
|
(73,450
|
)
|
(37,331
|
)
|
(12,480
|
)
|
1,719
|
|
94,946
|
|
—
|
|
(120,304
|
)
|
||||||||||||||
|
Purchase accounting adjustments
|
—
|
|
121
|
|
(518
|
)
|
(3,447
|
)
|
10,871
|
|
—
|
|
(7,027
|
)
|
||||||||||||||
|
Inter-segment eliminations
|
(673
|
)
|
(647
|
)
|
391
|
|
—
|
|
—
|
|
—
|
|
(417
|
)
|
||||||||||||||
|
$
|
(285,973
|
)
|
$
|
(162,519
|
)
|
$
|
30,115
|
|
$
|
(4,444
|
)
|
$
|
105,817
|
|
$
|
(240,783
|
)
|
$
|
(14,159
|
)
|
||||||||
|
(a)
|
See “Business Segment Results” for a more detailed discussion of the operating results of our segments
.
|
|
(b)
|
Direct operating expenses primarily include:
|
|
•
|
event costs related to the presentation, production and marketing of our events;
|
|
•
|
revenue sharing expenses associated with the venue-related signage, sponsorship and suite license fee revenues that are attributable to
MSG Sports
;
|
|
•
|
venue lease, maintenance and other operating expenses, net of recovery charges for venue usage from
MSG Sports
for hosting the home games of the Knicks and Rangers at The Garden;
|
|
•
|
the cost of concessions, merchandise and food and beverage sold at our venues; and
|
|
•
|
restaurant operating expenses, inclusive of labor costs.
|
|
(c)
|
Selling, general and administrative expenses (“SG&A”) primarily consist of administrative costs, including compensation, professional fees, sales and marketing costs, including non-event related advertising expenses, and business development costs, as well as costs associated with the development of MSG Sphere, including technology and content development costs.
|
|
Tao Group Hospitality Segment
|
Purchase accounting adjustments
|
Total
|
||||||||||
|
Intangibles
|
$
|
—
|
|
$
|
3,541
|
|
$
|
3,541
|
|
|||
|
Long-lived assets
|
6,363
|
|
7,330
|
|
13,693
|
|
||||||
|
Goodwill
|
88,583
|
|
—
|
|
88,583
|
|
||||||
|
$
|
94,946
|
|
$
|
10,871
|
|
$
|
105,817
|
|
||||
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2020
|
2019
|
Amount
|
Percentage
|
||||||||||||
|
Operating loss
|
$
|
(59,756
|
)
|
$
|
(45,597
|
)
|
$
|
(14,159
|
)
|
(31
|
)%
|
||||
|
Share-based compensation
|
42,190
|
|
35,401
|
|
|
|
|||||||||
|
Depreciation and amortization
(a)
|
104,899
|
|
109,343
|
|
|
|
|||||||||
|
Impairment of intangibles, long-lived assets and goodwill
|
105,817
|
|
—
|
|
|||||||||||
|
Gain on disposal of assets held for sale, including legal settlement
|
(240,783
|
)
|
—
|
|
|||||||||||
|
Other purchase accounting adjustments
(b)
|
4,367
|
|
4,764
|
|
|||||||||||
|
Adjusted operating income (loss)
|
$
|
(43,266
|
)
|
$
|
103,911
|
|
$
|
(147,177
|
)
|
NM
|
|
||||
|
(a)
|
Depreciation and amortization included purchase accounting adjustments of
$12,454
and
$15,901
for the years ended
June 30, 2020
and
2019
, respectively.
|
|
(b)
|
Other purchase accounting adjustments for the years ended
June 30, 2020
and
2019
primarily included rent expenses associated with the amortization of favorable leases in connection with the Tao Group Hospitality acquisition.
|
|
Decrease in adjusted operating income of the Entertainment segment
|
$
|
(123,947
|
)
|
|
Decrease in adjusted operating income of the Tao Group Hospitality segment
|
(22,813
|
)
|
|
|
Inter-segment eliminations
|
(417
|
)
|
|
|
$
|
(147,177
|
)
|
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2020
|
2019
|
Amount
|
Percentage
|
||||||||||||
|
Revenues
|
$
|
585,208
|
|
$
|
797,058
|
|
$
|
(211,850
|
)
|
(27
|
)%
|
||||
|
Direct operating expenses
|
388,643
|
|
513,305
|
|
(124,662
|
)
|
(24
|
)%
|
|||||||
|
Selling, general and administrative expenses
|
282,043
|
|
239,321
|
|
42,722
|
|
18
|
%
|
|||||||
|
Depreciation and amortization
|
84,289
|
|
87,005
|
|
(2,716
|
)
|
(3
|
)%
|
|||||||
|
Gain on disposal of assets held for sale and associated settlements
|
(240,783
|
)
|
—
|
|
(240,783
|
)
|
NM
|
|
|||||||
|
Operating income (loss)
|
$
|
71,016
|
|
$
|
(42,573
|
)
|
$
|
113,589
|
|
NM
|
|
||||
|
Reconciliation to adjusted operating income:
|
|||||||||||||||
|
Share-based compensation
|
41,227
|
|
35,264
|
|
|
|
|||||||||
|
Depreciation and amortization
|
84,289
|
|
87,005
|
|
|||||||||||
|
Gain on disposal of assets held for sale, including legal settlement
|
(240,783
|
)
|
—
|
|
|||||||||||
|
Adjusted operating income (loss)
|
$
|
(44,251
|
)
|
$
|
79,696
|
|
$
|
(123,947
|
)
|
NM
|
|
||||
|
Decrease in event-related revenues from concerts, as discussed below
|
$
|
(77,282
|
)
|
|
Decrease in venue-related signage and sponsorship revenues, as discussed below
|
(32,524
|
)
|
|
|
Decrease in event-related revenues from other live sporting events due to the closure of venues after March 12, 2020 as a result of the COVID-19 pandemic
|
(26,273
|
)
|
|
|
Decrease in suite license fee revenues due to the closure of venues after March 12, 2020 as a result of the COVID-19 pandemic
|
(25,535
|
)
|
|
|
Decrease in event-related revenues from other live entertainment events, as discussed below
|
(23,631
|
)
|
|
|
Decrease in BCE event-related revenues due to the cancellation of Boston Calling Music Festival in May 2020 as a result of the COVID-19 pandemic
|
(10,578
|
)
|
|
|
Decrease in revenues from Obscura due to the decision to wind down its third-party production business to focus on the development of MSG Sphere
|
(9,790
|
)
|
|
|
Decrease in revenues associated with the expiration of the Wang Theatre booking agreement in February 2019
|
(3,888
|
)
|
|
|
Other net decreases, as discussed below
|
(2,349
|
)
|
|
|
$
|
(211,850
|
)
|
|
|
Decrease in event-related direct operating expenses associated with concerts primarily due to the impact of the closure of venues after March 12, 2020 due to the COVID-19 pandemic
|
$
|
(37,159
|
)
|
|
Decrease in direct operating expenses associated with venue-related signage and sponsorship primarily due to lower revenue sharing expenses with MSG Sports associated with venue related signage and sponsorship revenue decreases
|
(19,094
|
)
|
|
|
Decrease in direct operating expenses associated with suite licenses primarily due to lower revenue sharing expenses with MSG Sports associated with suite license fee revenue decreases
|
(18,695
|
)
|
|
|
Decrease in event-related expenses associated with live sporting events primarily due to the impact of the closure of venues after March 12, 2020 due to the COVID-19 pandemic
|
(16,774
|
)
|
|
|
Decrease in BCE event-related expenses due to the cancellation of Boston Calling Music Festival in May 2020 as a result of the COVID-19 pandemic
|
(14,536
|
)
|
|
|
Decrease in event-related direct operating expenses associated with other live entertainment events, as discussed below
|
(14,143
|
)
|
|
|
Decrease in direct operating expenses associated with Obscura due to the decision to wind down its third-party production business to focus on the development of MSG Sphere
|
(9,260
|
)
|
|
|
Decrease in direct operating expenses associated with the expiration of the Wang Theatre booking agreement in February 2019
|
(2,525
|
)
|
|
|
Increase in venue operating costs, net of recovery charges from Madison Square Garden Sports Corp., as discussed below
|
12,634
|
|
|
|
Other net decreases
|
(5,110
|
)
|
|
|
$
|
(124,662
|
)
|
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2020
|
2019
|
Amount
|
Percentage
|
||||||||||||
|
Revenues
|
$
|
180,201
|
|
$
|
253,651
|
|
$
|
(73,450
|
)
|
(29
|
)%
|
||||
|
Direct operating expenses
|
116,638
|
|
153,969
|
|
(37,331
|
)
|
(24
|
)%
|
|||||||
|
Selling, general and administrative expenses
|
63,049
|
|
75,529
|
|
(12,480
|
)
|
(17
|
)%
|
|||||||
|
Depreciation and amortization
|
8,156
|
|
6,437
|
|
1,719
|
|
27
|
%
|
|||||||
|
Impairment for intangibles, long-lived assets, and goodwill
|
94,946
|
|
—
|
|
94,946
|
|
NM
|
|
|||||||
|
Operating income (loss)
|
$
|
(102,588
|
)
|
$
|
17,716
|
|
$
|
(120,304
|
)
|
NM
|
|
||||
|
Reconciliation to adjusted operating income:
|
|
|
|
|
|||||||||||
|
Share-based compensation
|
963
|
|
137
|
|
|||||||||||
|
Depreciation and amortization
|
8,156
|
|
6,437
|
|
|||||||||||
|
Impairment for intangibles, long-lived assets, and goodwill
|
94,946
|
|
—
|
|
|||||||||||
|
Adjusted operating income
|
$
|
1,477
|
|
$
|
24,290
|
|
$
|
(22,813
|
)
|
(94
|
)%
|
||||
|
Decrease in revenues due to the temporary closure of venues as a result of the COVID-19 pandemic
|
$
|
(72,436
|
)
|
|
Decrease in revenues associated with the permanent closing of (i) Vandal, (ii) Stanton Social, and (iii) Avenue in New York
|
(12,013
|
)
|
|
|
Decrease in revenues associated with comparable sales primarily in New York venues prior to the temporary closure of venues due to the COVID-19 pandemic
|
(7,282
|
)
|
|
|
Increase in revenues associated with new venue sales primarily due to the opening of Tao Chicago in September 2018 prior to the temporary closure of the venue due to the COVID-19 pandemic
|
14,802
|
|
|
|
Other net increases primarily due to higher revenues from special events and consulting fees for venue developments
|
3,479
|
|
|
|
$
|
(73,450
|
)
|
|
|
Decrease in (i) employee compensation and related benefits, (ii) costs of food and beverage, and (iii) costs of venue entertainment due to the closure of venues as a result of the COVID-19 pandemic
|
$
|
(32,509
|
)
|
|
Decrease in direct operating expenses associated with costs of food and beverage during the comparable periods prior to the closure of venues due to the COVID-19 pandemic
|
(3,530
|
)
|
|
|
Decrease in direct operating expenses associated with rent expense primarily due to rent concessions received
|
(2,404
|
)
|
|
|
Decrease in direct operating expenses associated with employee compensation and related benefits during the comparable periods prior to the closure of venues due to the COVID-19 pandemic
|
(1,624
|
)
|
|
|
Other net increases primarily due to a higher allowance for doubtful accounts
|
2,736
|
|
|
|
$
|
(37,331
|
)
|
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2019
|
2018
|
Amount
|
Percentage
|
||||||||||||
|
Revenues
|
$
|
1,048,909
|
|
$
|
988,990
|
|
$
|
59,919
|
|
6
|
%
|
||||
|
Direct operating expenses
|
670,641
|
|
635,218
|
|
35,423
|
|
6
|
%
|
|||||||
|
SG&A
|
314,522
|
|
272,996
|
|
41,526
|
|
15
|
%
|
|||||||
|
Depreciation and amortization
|
109,343
|
|
112,058
|
|
(2,715
|
)
|
(2
|
)%
|
|||||||
|
Operating loss
|
(45,597
|
)
|
(31,282
|
)
|
(14,315
|
)
|
(46
|
)%
|
|||||||
|
Other income (expense):
|
|||||||||||||||
|
Earnings (loss) in equity method investments
|
7,062
|
|
(3,758
|
)
|
10,820
|
|
NM
|
|
|||||||
|
Interest income, net
|
14,901
|
|
9,198
|
|
5,703
|
|
62
|
%
|
|||||||
|
Miscellaneous expense, net
|
(6,061
|
)
|
(3,101
|
)
|
(2,960
|
)
|
(95
|
)%
|
|||||||
|
Loss from operations before income taxes
|
(29,695
|
)
|
(28,943
|
)
|
(752
|
)
|
(3
|
)%
|
|||||||
|
Income tax benefit (expense)
|
(443
|
)
|
30,830
|
|
(31,273
|
)
|
NM
|
|
|||||||
|
Net income (loss)
|
(30,138
|
)
|
1,887
|
|
(32,025
|
)
|
NM
|
|
|||||||
|
Less: Net loss attributable to redeemable noncontrolling interests
|
(7,299
|
)
|
(628
|
)
|
(6,671
|
)
|
NM
|
|
|||||||
|
Less: Net loss attributable to nonredeemable noncontrolling interests
|
(4,945
|
)
|
(4,383
|
)
|
(562
|
)
|
(13
|
)%
|
|||||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(17,894
|
)
|
$
|
6,898
|
|
$
|
(24,792
|
)
|
NM
|
|
||||
|
Changes attributable to
|
Revenues
|
Direct
operating expenses |
SG&A
|
Depreciation
and amortization |
Operating
income (loss) |
|||||||||||||||
|
Entertainment segment
(a)
|
$
|
50,518
|
|
$
|
20,081
|
|
$
|
37,066
|
|
$
|
(2,624
|
)
|
$
|
(4,005
|
)
|
|||||
|
Tao Group Hospitality segment
(a)
|
10,837
|
|
16,246
|
|
4,921
|
|
(804
|
)
|
(9,526
|
)
|
||||||||||
|
Purchase accounting adjustments
|
—
|
|
(395
|
)
|
391
|
|
713
|
|
(709
|
)
|
||||||||||
|
Inter-segment eliminations
|
(1,436
|
)
|
(509
|
)
|
(852
|
)
|
—
|
|
(75
|
)
|
||||||||||
|
$
|
59,919
|
|
$
|
35,423
|
|
$
|
41,526
|
|
$
|
(2,715
|
)
|
$
|
(14,315
|
)
|
||||||
|
(a)
|
See “Business Segment Results” for a more detailed discussion of the operating results of our segments
.
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2019
|
2018
|
Amount
|
Percentage
|
||||||||||||
|
Operating loss
|
$
|
(45,597
|
)
|
$
|
(31,282
|
)
|
$
|
(14,315
|
)
|
(46
|
)%
|
||||
|
Share-based compensation
|
35,401
|
|
27,286
|
|
|
|
|||||||||
|
Depreciation and amortization
(a)
|
109,343
|
|
112,058
|
|
|
|
|||||||||
|
Other purchase accounting adjustments
(b)
|
4,764
|
|
4,768
|
|
|||||||||||
|
Adjusted operating income
|
$
|
103,911
|
|
$
|
112,830
|
|
$
|
(8,919
|
)
|
(8
|
)%
|
||||
|
(a)
|
Depreciation and amortization included purchase accounting adjustments of $
15,901
and
$15,188
for the years ended
June 30, 2019
and
2018
, respectively.
|
|
(b)
|
Other purchase accounting adjustments for the year ended
June 30, 2019
and
2018
primarily included the amortization of favorable leases in connection with the Tao Group Hospitality acquisition.
|
|
Increase in adjusted operating income of the Entertainment segment
|
$
|
1,517
|
|
|
Decrease in adjusted operating income of the Tao Group Hospitality segment
|
(10,361
|
)
|
|
|
Inter-segment eliminations
|
(75
|
)
|
|
|
$
|
(8,919
|
)
|
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2019
|
2018
|
Amount
|
Percentage
|
||||||||||||
|
Revenues
|
$
|
797,058
|
|
$
|
746,540
|
|
$
|
50,518
|
|
7
|
%
|
||||
|
Direct operating expenses
|
513,305
|
|
493,224
|
|
20,081
|
|
4
|
%
|
|||||||
|
Selling, general and administrative expenses
|
239,321
|
|
202,255
|
|
37,066
|
|
18
|
%
|
|||||||
|
Depreciation and amortization
|
87,005
|
|
89,629
|
|
(2,624
|
)
|
(3
|
)%
|
|||||||
|
Operating loss
|
$
|
(42,573
|
)
|
$
|
(38,568
|
)
|
$
|
(4,005
|
)
|
(10
|
)%
|
||||
|
Reconciliation to adjusted operating income:
|
|||||||||||||||
|
Share-based compensation
|
35,264
|
|
27,118
|
|
|
|
|||||||||
|
Depreciation and amortization
|
87,005
|
|
89,629
|
|
|||||||||||
|
Adjusted operating income
|
$
|
79,696
|
|
$
|
78,179
|
|
$
|
1,517
|
|
2
|
%
|
||||
|
Increase in event-related revenues from concerts, as discussed below
|
$
|
19,966
|
|
|
Increase in event-related revenues from live sporting events due to higher per event revenue, slightly offset by fewer events
|
16,172
|
|
|
|
Increase in revenues from the presentation of the
Christmas Spectacular
, as discussed below
|
14,797
|
|
|
|
Increase in venue-related signage and sponsorship revenues due to increased sales of existing sponsorship and signage inventory
|
8,069
|
|
|
|
Increase in revenues from Obscura, as discussed below
|
5,311
|
|
|
|
Increase in suite license fee revenues due to rate increases and, to a lesser extent, the impact of the new revenue recognition standard in Fiscal Year 2019, partially offset by lower sales of suite products
|
4,528
|
|
|
|
Increase in ad sales commission due to increased sales in advertising availabilities of MSG Networks
|
1,912
|
|
|
|
Decrease in event-related revenues from other live entertainment events, as discussed below
|
(16,899
|
)
|
|
|
Decrease in BCE event-related revenues primarily due to lower ticket-related revenues from the Boston Calling Music Festival
|
(3,255
|
)
|
|
|
Other net decreases
|
(83
|
)
|
|
|
$
|
50,518
|
|
|
|
Increase in event-related expenses associated with live sporting events due to higher per event expenses, slightly offset by fewer events
|
$
|
10,501
|
|
|
Increase in direct operating expenses associated with Obscura, as discussed below
|
5,871
|
|
|
|
Increase in direct operating expenses associated with the presentation of the
Christmas Spectacular
, as discussed below
|
5,187
|
|
|
|
Increase in direct operating expenses associated with suite licenses primarily due to higher revenue sharing expenses associated with suite license fee revenues increases
|
3,914
|
|
|
|
Increase in venue operating costs, net of recovery charges from MSG Sports primarily due to lower recovery charges for venue usage from MSG Sports for hosting the professional sports franchises’ home games of the Knicks and Rangers at The Garden
|
2,192
|
|
|
|
Increase in direct operating expenses associated with the venue-related signage and sponsorship primarily due to increased sales of existing sponsorship inventory
|
2,063
|
|
|
|
Increase in direct operating expenses associated with the Company’s exploration of a new theatrical production
|
1,485
|
|
|
|
Decrease in event-related direct operating expenses associated with other live entertainment events as discussed below
|
(9,757
|
)
|
|
|
Decrease in BCE event-related direct operating expenses due to lower costs related to the Boston Calling Music Festival
|
(1,914
|
)
|
|
|
Decrease in event-related direct operating expenses associated with concerts, as discussed below
|
(978
|
)
|
|
|
Other net increases
|
1,517
|
|
|
|
$
|
20,081
|
|
|
|
Years Ended June 30,
|
Change
|
||||||||||||||
|
2019
|
2018
|
Amount
|
Percentage
|
||||||||||||
|
Revenues
|
$
|
253,651
|
|
$
|
242,814
|
|
$
|
10,837
|
|
4
|
%
|
||||
|
Direct operating expenses
|
153,969
|
|
137,723
|
|
16,246
|
|
12
|
%
|
|||||||
|
Selling, general and administrative expenses
|
75,529
|
|
70,608
|
|
4,921
|
|
7
|
%
|
|||||||
|
Depreciation and amortization
|
6,437
|
|
7,241
|
|
(804
|
)
|
(11
|
)%
|
|||||||
|
Operating income
|
$
|
17,716
|
|
$
|
27,242
|
|
$
|
(9,526
|
)
|
(35
|
)%
|
||||
|
Reconciliation to adjusted operating income:
|
|||||||||||||||
|
Share-based compensation
|
137
|
|
168
|
|
|||||||||||
|
Depreciation and amortization
|
6,437
|
|
7,241
|
|
|||||||||||
|
Adjusted operating income
|
$
|
24,290
|
|
$
|
34,651
|
|
$
|
(10,361
|
)
|
(30
|
)%
|
||||
|
Increase in revenues associated with new venue sales primarily due to the opening of Tao Chicago in September 2018
|
$
|
20,590
|
|
|
Decrease in revenues associated with comparable sales primarily due to New York and Los Angeles venues inclusive of the impact of Fiscal Year 2019 containing 52 weeks of operations as compared to 53 weeks during Fiscal Year 2018 due to the timing of the retail calendar
|
(7,437
|
)
|
|
|
Decrease in revenues associated with the closing of Stanton Social in New York
|
(2,419
|
)
|
|
|
Other net increases
|
103
|
|
|
|
$
|
10,837
|
|
|
|
Increase in direct operating expenses associated with employee compensation and related benefits
|
$
|
8,278
|
|
|
Increase in direct operating expenses associated with performer costs
|
4,554
|
|
|
|
Increase in direct operating expenses associated with costs of food and beverage
|
2,046
|
|
|
|
Increase in direct operating expenses associated with leased costs
|
992
|
|
|
|
Other net increases
|
376
|
|
|
|
$
|
16,246
|
|
|
|
•
|
We have revised our processes and construction schedule for MSG Sphere, providing for a substantially reduced spend in fiscal year 2021 and a lengthened timetable that enables the Company to preserve cash in the near-term. We now expect to open MSG Sphere in Las Vegas in
calendar year 2023
;
|
|
•
|
In connection with our extended construction timeline, we have reduced our expected near-term spending on technology and content development for MSG Sphere;
|
|
•
|
At the end of May, we ended all financial support that was previously provided for certain event-level employees at the Company’s performance venues, and as a result virtually all venue employees, approximately
6,000
in total, are effectively furloughed;
|
|
•
|
At the end of March, Tao Group Hospitality eliminated essentially all of its venue line staff and manager positions, with limited numbers of employees returning as operations slowly resume. In August, Tao Group Hospitality reduced its corporate workforce;
|
|
•
|
In August, we reduced our regular full-time workforce by approximately
350
positions; and
|
|
•
|
We have implemented and are continuing to pursue additional comprehensive cost reduction measures, including terminating certain third-party services, negotiating reduced rates and/or reduced service levels with third parties, and pursuing targeted savings and reductions in spending on marketing and travel and entertainment, and deferring or limiting non-essential operating or other discretionary expenses.
|
|
•
|
The Company is having conversations with landlords and other vendors about relief from cash payments, some of which may not be successful; and
|
|
•
|
We are actively pursuing potential financing options, including incurring up to
$500,000
of long-term debt, which is expected to be comprised of senior notes or term loan and revolver facilities.
|
|
Years Ended June 30,
|
||||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Net income (loss)
|
$
|
(14,687
|
)
|
$
|
(30,138
|
)
|
$
|
1,887
|
|
|||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
126,815
|
|
149,192
|
|
114,454
|
|
||||||
|
Subtotal
|
$
|
112,128
|
|
$
|
119,054
|
|
$
|
116,341
|
|
|||
|
Changes in working capital assets and liabilities
|
(16,097
|
)
|
(27,330
|
)
|
28,044
|
|
||||||
|
Net cash provided by operating activities
|
$
|
96,031
|
|
$
|
91,724
|
|
$
|
144,385
|
|
|||
|
Net cash used in investing activities
|
(389,657
|
)
|
(228,063
|
)
|
(169,624
|
)
|
||||||
|
Net cash provided by (used in) financing activities
|
122,938
|
|
(8,621
|
)
|
15,356
|
|
||||||
|
Effect of exchange rates on cash, cash equivalents and restricted cash
|
2,927
|
|
4,669
|
|
331
|
|
||||||
|
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(167,761
|
)
|
$
|
(140,291
|
)
|
$
|
(9,552
|
)
|
|||
|
|
Payments Due by Period
|
|||||||||||||||||||
|
|
Total
|
Year
1
|
Years
2-3
|
Years
4-5
|
More Than
5 Years
|
|||||||||||||||
|
Off-Balance Sheet Commitments:
(a)
|
||||||||||||||||||||
|
Contractual obligations
|
$
|
3,116
|
|
$
|
2,926
|
|
$
|
190
|
|
$
|
—
|
|
$
|
—
|
|
|||||
|
Letters of credit
(b)
|
9,664
|
|
9,664
|
|
—
|
|
—
|
|
—
|
|
||||||||||
|
12,780
|
|
12,590
|
|
190
|
|
—
|
|
—
|
|
|||||||||||
|
On-Balance Sheet Commitments:
|
||||||||||||||||||||
|
Leases
(c)
|
319,476
|
|
56,829
|
|
110,935
|
|
60,560
|
|
91,152
|
|
||||||||||
|
Debt repayments
(d)
|
34,387
|
|
5,637
|
|
16,250
|
|
12,500
|
|
—
|
|
||||||||||
|
Other
(e)
|
89,563
|
|
89,149
|
|
236
|
|
178
|
|
—
|
|
||||||||||
|
443,426
|
|
151,615
|
|
127,421
|
|
73,238
|
|
91,152
|
|
|||||||||||
|
Total
(f) (g)
|
$
|
456,206
|
|
$
|
164,205
|
|
$
|
127,611
|
|
$
|
73,238
|
|
$
|
91,152
|
|
|||||
|
(a)
|
Off balance sheet arrangements disclosed in the table above do not include MSG Sphere related commitments of approximately
$1,220,000
that are not reflected on the balance sheet
.
Such arrangements are associated with the development and construction of MSG Sphere in Las Vegas. The timing of the future cash payments disclosed is uncertain and may change as the development and construction of MSG Sphere in Las Vegas progresses.
|
|
(b)
|
Consists of letters of credit obtained by the Company as collateral for development of MSG Sphere in Las Vegas and lease agreements of the Company and Tao Group Hospitality.
|
|
(c)
|
Includes contractually obligated minimum lease payments for operating leases having an initial noncancelable term in excess of one year for the Company’s venues, including the Tao Group Hospitality venues and various corporate offices. These commitments are presented exclusive of the imputed interest used to reflect the payment’s present value.
See
Note
9
to the
consolidated and combined financial statements
included in Item
8
of this Annual Report on Form 10-K for more information.
|
|
(d)
|
See Note
13
to the
consolidated and combined financial statements
included in Item
8
of this Annual Report on Form 10-K for more information surrounding the principal repayments required under the
Tao Senior Secured Credit Facilities
and
a note with respect to a loan received by BCE from its noncontrolling interest holder that is due in April 2021
.
|
|
(e)
|
Includes MSG Sphere related commitments of approximately
$74,955
associated with the development and construction of MSG Sphere in Las Vegas, all due within fiscal year 2021.
|
|
(f)
|
Pension obligations have been excluded from the table above as the timing of the future cash payments is uncertain.
See
Note
14
to the
consolidated and combined financial statements
included in Item
8
of this Annual Report on Form 10-K for more information on the future funding requirements under our pension obligations.
|
|
(g)
|
In connection with the
Entertainment Distribution
, the Company entered into the
DDTL Facilities
. Pursuant to the
DDTL Facilities
, two of
MSG Sports
’ subsidiaries, MSG NYK Holdings, LLC and MSG NYR Holdings, LLC may draw up to
$110,000
and
$90,000
, respectively, until October 17, 2021 subject to certain conditions. The lending requirements under
DDTL Facilities
have been excluded from the table above as the timing of the future cash payments is uncertain.
|
|
Goodwill
|
$
|
74,309
|
|
|
Indefinite-lived intangible assets
|
63,801
|
|
|
|
Amortizable intangible assets, net of accumulated amortization
|
150,426
|
|
|
|
Property and equipment, net
|
1,646,115
|
|
|
|
Right-of-use lease assets
|
220,328
|
|
|
|
$
|
2,154,979
|
|
|
|
Entertainment
|
$
|
74,309
|
|
|
Tao Group Hospitality
|
—
|
|
|
|
$
|
74,309
|
|
|
|
•
|
macroeconomic conditions;
|
|
•
|
industry and market considerations;
|
|
•
|
cost factors;
|
|
•
|
overall financial performance of the reporting unit;
|
|
•
|
other relevant company-specific factors such as changes in management, strategy or customers; and
|
|
•
|
relevant reporting unit specific events such as changes in the carrying amount of net assets.
|
|
Trademarks
|
$
|
61,881
|
|
|
Photographic related rights
|
1,920
|
|
|
|
$
|
63,801
|
|
|
|
•
|
cost factors;
|
|
•
|
financial performance;
|
|
•
|
legal, regulatory, contractual, business or other factors;
|
|
•
|
other relevant company-specific factors such as changes in management, strategy or customers;
|
|
•
|
industry and market considerations; and
|
|
•
|
macroeconomic conditions.
|
|
Estimated
Useful Lives |
Net Carrying
Value
|
||||||
|
Trade names
|
10
|
to
|
25 years
|
$
|
76,756
|
|
|
|
Venue management contracts
|
12
|
to
|
25 years
|
63,410
|
|
||
|
Non-compete agreements
|
|
|
5.75 years
|
3,652
|
|
||
|
Festival rights
|
15 years
|
5,924
|
|
||||
|
Other intangibles
|
|
|
15 years
|
684
|
|
||
|
$
|
150,426
|
|
|||||
|
Net Periodic
Benefit Cost
|
Benefit
Obligation
|
||
|
Healthcare cost trend rate assumed for next year
|
6.75%
|
6.50%
|
|
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
5.00%
|
5.00%
|
|
|
Year that the rate reaches the ultimate trend rate
|
2027
|
2027
|
|
|
Increase
(Decrease) on
Total of Service
and Interest Cost
Components
|
Increase
(Decrease) on
Benefit Obligation
|
||||||
|
One percentage point increase
|
$
|
15
|
|
$
|
268
|
|
|
|
One percentage point decrease
|
(13
|
)
|
(245
|
)
|
|||
|
Page
No.
|
|||
|
The following documents are filed as part of this report:
|
|||
|
1.
|
The financial statements as indicated in the index set forth on page
|
||
|
2.
|
Financial statement schedule:
|
||
|
Schedule supporting consolidated and combined financial statements:
|
|||
|
Schedules other than that listed above have been omitted, since they are either not applicable, not required or the information is included elsewhere herein.
|
|||
|
3.
|
Exhibits:
|
||
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
EXHIBIT NO.
|
DESCRIPTION
|
|
|
101.INS
|
XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
104
|
The cover page form the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 formatted in Inline XBRL and contained in Exhibit 101.
|
|
|
†
|
This exhibit is a management contract or a compensatory plan or arrangement.
|
|
+
|
Certain confidential information - identified by bracketed asterisks “[*****]” - has been omitted from this exhibit pursuant to Item 601(b)(10) of Regulation S-K because it is both (i) not material and (ii) would be competitively harmful to the Registrant if publicly disclosed.
|
|
(Additions) / Deductions
|
||||||||||||||||||||||||
|
Balance at
Beginning
of Period
|
Charged to Costs and Expenses
|
Charged to Other Accounts
|
Deductions
|
Balance at
End of
Period
|
||||||||||||||||||||
|
Year ended June 30, 2020
|
||||||||||||||||||||||||
|
Allowance for doubtful accounts
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
|||||||||
|
Deferred tax valuation allowance
|
(
|
)
|
|
|
|
|
(a)
|
|
|
(
|
)
|
|||||||||||||
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
||||||||||
|
Year ended June 30, 2019
|
||||||||||||||||||||||||
|
Allowance for doubtful accounts
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
|||||||||
|
Deferred tax valuation allowance
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
||||||||||||||
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
||||||||||
|
Year ended June 30, 2018
|
||||||||||||||||||||||||
|
Allowance for doubtful accounts
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
|||||||||
|
Deferred tax valuation allowance
|
(
|
)
|
|
|
(b)
|
|
|
|
|
(
|
)
|
|||||||||||||
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
||||||||||
|
(a)
|
Prior to the Entertainment Distribution, the Company’s collection for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. The tax recognition on most of these deferred revenues was accelerated to the date of the Entertainment Distribution and is the responsibility of MSG Sports. The Company will not reimburse
MSG Sports
for such taxes. At the time of the Entertainment Distribution, the Company recorded a deferred tax asset of
$
|
|
(b)
|
For the year ended June 30, 2018, the valuation allowance was revalued under provisions contained in the Tax Cuts and Jobs Act, including a reduction in the valuation allowance of
$
|
|
Madison Square Garden Entertainment Corp.
|
||
|
By:
|
/s/ MARK H. FITZPATRICK
|
|
|
Name:
|
Mark H. FitzPatrick
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
|
Name
|
Title
|
Date
|
||
|
/s/ JAMES L. DOLAN
|
Executive Chairman and Chief Executive Officer
(Principal Executive Officer) and Director
|
August 28, 2020
|
||
|
James L. Dolan
|
||||
|
/
s
/ MARK H. FITZPATRICK
|
Executive Vice President and
Chief Financial Officer (Principal Financial Officer)
|
August 28, 2020
|
||
|
Mark H. FitzPatrick
|
||||
|
/
s
/ JOSEPH F. YOSPE
|
Senior Vice President, Controller and
Principal Accounting Officer
|
August 28, 2020
|
||
|
Joseph F. Yospe
|
||||
|
/
s
/ MARTIN BANDIER
|
Director
|
August 28, 2020
|
||
|
Martin Bandier
|
||||
|
/s/ MATTHEW C. BLANK
|
Director
|
August 28, 2020
|
||
|
Matthew C. Blank
|
||||
|
/
s
/ CHARLES F. DOLAN
|
Director
|
August 28, 2020
|
||
|
Charles F. Dolan
|
||||
|
/
s
/ CHARLES P. DOLAN
|
Director
|
August 28, 2020
|
||
|
Charles P. Dolan
|
||||
|
/
s
/ KRISTIN A. DOLAN
|
Director
|
August 28, 2020
|
||
|
Kristin A. Dolan
|
||||
|
Name
|
Title
|
Date
|
||
|
/
s
/ MARIANNE DOLAN WEBER
|
Director
|
August 28, 2020
|
||
|
Marianne Dolan Weber
|
||||
|
/s/ PAUL J. DOLAN
|
Director
|
August 28, 2020
|
||
|
Paul J. Dolan
|
||||
|
/s/ QUENTIN F. DOLAN
|
Director
|
August 28, 2020
|
||
|
Quentin F. Dolan
|
||||
|
/s/ RYAN T. DOLAN
|
Director
|
August 28, 2020
|
||
|
Ryan T. Dolan
|
||||
|
/
s
/ THOMAS C. DOLAN
|
Director
|
August 28, 2020
|
||
|
Thomas C. Dolan
|
||||
|
/
s
/ JOSEPH J. LHOTA
|
Director
|
August 28, 2020
|
||
|
Joseph J. Lhota
|
||||
|
/
s
/ FEDERIC V. SALERNO
|
Director
|
August 28, 2020
|
||
|
Frederic V. Salerno
|
||||
|
/s/ BRIAN G. SWEENEY
|
Director
|
August 28, 2020
|
||
|
Brian G. Sweeney
|
||||
|
/
s
/ JOHN L. SKYES
|
Director
|
August 28, 2020
|
||
|
John L. Sykes
|
||||
|
/s/ VINCENT TESE
|
Director
|
August 28, 2020
|
||
|
Vincent Tese
|
||||
|
/
s
/ ISIAH L. THOMAS III
|
Director
|
August 28, 2020
|
||
|
Isiah L. Thomas III
|
||||
|
|
|
|
|
Page
|
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||
|
CONSOLIDATED AND COMBINED BALANCE SHEETS
|
||||||||
|
(in thousands, except per share data)
|
||||||||
|
June 30,
|
||||||||
|
2020
|
2019
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
|
|
$
|
|
|
||
|
Restricted cash
|
|
|
|
|
||||
|
Short-term investments
|
|
|
|
|
||||
|
Accounts receivable, net
|
|
|
|
|
||||
|
Net related party receivables
|
|
|
|
|
||||
|
Prepaid expenses
|
|
|
|
|
||||
|
Other current assets
|
|
|
|
|
||||
|
Total current assets
|
|
|
|
|
||||
|
Investments and loans to nonconsolidated affiliates
|
|
|
|
|
||||
|
Property and equipment, net
|
|
|
|
|
||||
|
Right-of-use lease assets
|
|
|
|
|
||||
|
Amortizable intangible assets, net
|
|
|
|
|
||||
|
Indefinite-lived intangible assets
|
|
|
|
|
||||
|
Goodwill
|
|
|
|
|
||||
|
Other assets
|
|
|
|
|
||||
|
Total assets
|
$
|
|
|
$
|
|
|
||
|
See accompanying notes to consolidated and combined financial statements.
|
||||||||
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||
|
CONSOLIDATED AND COMBINED BALANCE SHEETS (Continued)
|
||||||||
|
(in thousands, except per share data)
|
||||||||
|
June 30,
|
||||||||
|
2020
|
2019
|
|||||||
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
||||||||
|
Current Liabilities:
|
||||||||
|
Accounts payable
|
$
|
|
|
$
|
|
|
||
|
Net related party payables, current
|
|
|
|
|
||||
|
Current portion of long-term debt, net of deferred financing costs
|
|
|
|
|
||||
|
Accrued liabilities:
|
||||||||
|
Employee related costs
|
|
|
|
|
||||
|
Other accrued liabilities
|
|
|
|
|
||||
|
Operating lease liabilities, current
|
|
|
|
|
||||
|
Collections due to promoters
|
|
|
|
|
||||
|
Deferred revenue
|
|
|
|
|
||||
|
Total current liabilities
|
|
|
|
|
||||
|
Related party payables, noncurrent
|
|
|
|
|
||||
|
Long-term debt, net of deferred financing costs
|
|
|
|
|
||||
|
Operating lease liabilities, noncurrent
|
|
|
|
|
||||
|
Defined benefit and other postretirement obligations
|
|
|
|
|
||||
|
Other employee related costs
|
|
|
|
|
||||
|
Deferred tax liabilities, net
|
|
|
|
|
||||
|
Other liabilities
|
|
|
|
|
||||
|
Total liabilities
|
|
|
|
|
||||
|
Commitments and contingencies (see Note 11)
|
|
|
||||||
|
Redeemable noncontrolling interests
|
|
|
|
|
||||
|
Madison Square Garden Entertainment Corp. Stockholders’ Equity:
|
||||||||
|
Class A common stock, par value $0.01, 120,000 shares authorized; 19,493 shares outstanding as of June 30, 2020
|
|
|
|
|
||||
|
Class B common stock, par value $0.01, 30,000 shares authorized; 4,530 shares outstanding as of June 30, 2020
|
|
|
|
|
||||
|
Preferred stock, par value $0.01, 15,000 shares authorized; none outstanding as of June 30, 2020
|
|
|
|
|
||||
|
Additional paid-in capital
|
|
|
|
|
||||
|
Treasury stock, at cost, no shares as of June 30, 2020
|
|
|
|
|
||||
|
Retained earnings
|
|
|
|
|
||||
|
Madison Square Garden Sports Corp. Investment
|
|
|
|
|
||||
|
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
|
Total Madison Square Garden Entertainment Corp. stockholders’ equity
|
|
|
|
|
||||
|
Nonredeemable noncontrolling interests
|
|
|
|
|
||||
|
Total equity
|
|
|
|
|
||||
|
Total liabilities, redeemable noncontrolling interests and equity
|
$
|
|
|
$
|
|
|
||
|
|
||||||||||||
|
|
Years Ended June 30,
|
|||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Revenues
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Operating expenses:
|
||||||||||||
|
Direct operating expenses
(b)
|
|
|
|
|
|
|
||||||
|
Selling, general and administrative expenses
(c)
|
|
|
|
|
|
|
||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
||||||
|
Impairment for intangibles, long-lived assets, and goodwill
|
|
|
|
|
|
|
||||||
|
Gain on disposal of assets held for sale and associated settlements
|
(
|
)
|
|
|
|
|
||||||
|
Operating loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Other income (expense):
|
||||||||||||
|
Earnings (loss) in equity method investments
|
(
|
)
|
|
|
(
|
)
|
||||||
|
Interest income
(d)
|
|
|
|
|
|
|
||||||
|
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Miscellaneous income (expense), net
(e)
|
|
|
(
|
)
|
(
|
)
|
||||||
|
|
|
|
|
|
|
|||||||
|
Loss from operations before income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Income tax benefit (expense)
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Net income (loss)
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Less: Net loss attributable to redeemable noncontrolling interests
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Less: Net loss attributable to nonredeemable noncontrolling interests
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
Basic and diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders (f)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
Weighted-average number of common shares outstanding:
|
||||||||||||
|
Basic
(f)
|
|
|
|
|
|
|
||||||
|
Diluted
(f)
|
|
|
|
|
|
|
||||||
|
(a)
|
Includes revenues from related parties of
$
|
|
(b)
|
Includes net charges from related parties of
$
|
|
(c)
|
Includes net charges to related parties of
$(
|
|
(d)
|
|
|
(e)
|
Miscellaneous expense, net includes charges to related parties of
$(
|
|
(f)
|
On
April 17, 2020
(the “
Entertainment Distribution Date
”),
|
|
Years Ended June 30,
|
||||||||||||||||||||||||
|
2020
|
2019
|
2018
|
||||||||||||||||||||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|||||||||||||||
|
Other comprehensive income (loss), before income taxes:
|
||||||||||||||||||||||||
|
Pension plans and postretirement plan:
|
||||||||||||||||||||||||
|
Net unamortized losses arising during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||
|
Amounts reclassified from accumulated other comprehensive loss:
|
||||||||||||||||||||||||
|
Amortization of net actuarial loss included in net periodic benefit cost
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Amortization of net prior service credit included in net periodic benefit cost
|
|
|
|
(
|
)
|
|
(
|
)
|
|
|||||||||||||||
|
Settlement loss
|
|
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||
|
Cumulative translation adjustments
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Net changes related to available-for-sale securities
|
—
|
|
—
|
|
(
|
)
|
||||||||||||||||||
|
Other comprehensive income (loss), before income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Income tax expense related to items of other comprehensive income
|
|
|
|
|
—
|
|
||||||||||||||||||
|
Other comprehensive loss, net of income taxes
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||
|
Comprehensive loss
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||
|
Less: Comprehensive loss attributable to redeemable noncontrolling interests
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Less: Comprehensive loss attributable to nonredeemable noncontrolling interests
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Comprehensive income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||||||||
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||||||
|
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
|
||||||||||||
|
(in thousands)
|
||||||||||||
|
Years Ended June 30,
|
||||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
||||||
|
Impairment of intangibles, long-lived assets and goodwill
|
|
|
|
|
|
|
||||||
|
Share-based compensation expense
|
|
|
|
|
|
|
||||||
|
(Earnings) loss in equity method investments, net of income distributions
|
|
|
(
|
)
|
|
|
||||||
|
Benefit from deferred income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Purchase accounting adjustments associated with rent-related intangibles and deferred rent
|
|
|
|
|
|
|
||||||
|
Unrealized and realized (gain) loss on equity investment with readily determinable fair value
|
(
|
)
|
|
|
—
|
|
||||||
|
Provision for doubtful accounts
|
|
|
|
|
|
|
||||||
|
Gain on sale of the Forum, excluding associated settlement
|
(
|
)
|
|
|
|
|
||||||
|
Loss on extinguishment of debt, including deferred financing costs
|
|
|
|
|
—
|
|
||||||
|
Other non-cash adjustments
|
|
|
(
|
)
|
(
|
)
|
||||||
|
Change in assets and liabilities, net of acquisitions:
|
||||||||||||
|
Accounts receivable, net
|
|
|
(
|
)
|
(
|
)
|
||||||
|
Net related party receivables
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Prepaid expenses and other assets
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Accounts payable
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Net related party payables
|
(
|
)
|
|
|
(
|
)
|
||||||
|
Accrued and other liabilities
|
|
|
|
|
(
|
)
|
||||||
|
Collections due to promoters
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Deferred revenue
|
|
|
|
|
|
|
||||||
|
Operating lease right-of-use assets and lease liabilities
|
|
|
|
|
|
|
||||||
|
Net cash provided by operating activities
|
|
|
|
|
|
|
||||||
|
Cash flows from investing activities:
|
||||||||||||
|
Capital expenditures, net of acquisitions
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Purchase of short-term investments
|
(
|
)
|
(
|
)
|
—
|
|
||||||
|
Proceeds from maturity of short-term investment
|
|
|
—
|
|
—
|
|
||||||
|
Proceeds from sale of Forum, excluding associated settlement
|
|
|
—
|
|
—
|
|
||||||
|
Payments for acquisition of businesses, net of cash acquired
|
|
|
—
|
|
(
|
)
|
||||||
|
Proceeds from sale of equity investment
|
|
|
|
|
|
|
||||||
|
Proceeds from insurance recoveries
|
|
|
|
|
|
|
||||||
|
Investments and loans to nonconsolidated affiliates
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Proceeds from sales of nonconsolidated affiliates
|
|
|
|
|
|
|
||||||
|
Loan repayments received from nonconsolidated affiliates
|
|
|
|
|
|
|
||||||
|
Loan repayment received from subordinated debt
|
|
|
|
|
—
|
|
||||||
|
Cash received (paid) for notes receivable
|
|
|
(
|
)
|
(
|
)
|
||||||
|
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
See accompanying notes to consolidated and combined financial statements.
|
||||||||||||
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||||||
|
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Continued)
|
||||||||||||
|
(in thousands)
|
||||||||||||
|
Years Ended June 30,
|
||||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Net transfers from Madison Square Garden Sports Corp. and its subsidiaries
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Noncontrolling interest holders’ capital contributions
|
|
|
|
|
|
|
||||||
|
Distributions to noncontrolling interest holders
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Loans from noncontrolling interest holders
|
|
|
|
|
—
|
|
||||||
|
Proceeds from loan facility
|
|
|
|
|
|
|
||||||
|
Proceeds from revolving credit facility
|
|
|
|
|
|
|
||||||
|
Repayment of revolving credit facility
|
(
|
)
|
|
|
|
|
||||||
|
Repayment on long-term debt
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Payments for extinguishment of debt
|
|
|
(
|
)
|
|
|
||||||
|
Payments for financing costs
|
|
|
(
|
)
|
—
|
|
||||||
|
Net cash provided by (used in) financing activities
|
|
|
(
|
)
|
|
|
||||||
|
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
|
|
|
|
|
||||||
|
Net decrease in cash, cash equivalents and restricted cash
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
|
|
|
|
||||||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Non-cash investing and financing activities:
|
||||||||||||
|
Non-cash acquisitions additional noncontrolling redeemable interests
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Investments and loans to nonconsolidated affiliates
|
|
|
|
|
|
|
||||||
|
Capital expenditures incurred but not yet paid
|
|
|
|
|
|
|
||||||
|
Tenant improvement paid by landlord
|
|
|
|
|
|
|
||||||
|
Share-based compensation capitalized in property and equipment
|
|
|
|
|
|
|
||||||
|
Accrued earn-out liability and other contingencies
|
|
|
—
|
|
|
|
||||||
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||||||||||||||||||||||||||||||
|
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
|
||||||||||||||||||||||||||||||||||||
|
AND REDEEMABLE NONCONTROLLING INTERESTS
|
||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||
|
Common
Stock Issued |
MSG Sports Corp.’s Investment
|
Additional
Paid-In Capital |
Accumulated Deficit
|
Accumulated
Other Comprehensive Loss |
Total Madison Square Garden Entertainment Corp. Stockholders
’
Equity
|
Nonredeemable
Noncontrolling Interests |
Total Equity
|
Redeemable Noncontrolling Interests
|
||||||||||||||||||||||||||||
|
Balance as of June 30, 2017
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||
|
Adoption of ASU No. 2018-02
|
—
|
|
(
|
)
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||||||||
|
Net income (loss)
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||
|
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
||||||||||||||||||
|
Comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Net increase in Madison Square Garden Sports Corp. Investment
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Contributions from noncontrolling interest holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Distributions to noncontrolling interest holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Balance as of June 30, 2018
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||
|
See accompanying notes to consolidated and combined financial statements.
|
||||||||||||||||||||||||||||||||||||
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||||||||||||||||||||||||||||||
|
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
|
||||||||||||||||||||||||||||||||||||
|
AND REDEEMABLE NONCONTROLLING INTERESTS (Continued)
|
||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||
|
Common
Stock Issued |
MSG Sports Corp.’s Investment
|
Additional
Paid-In Capital |
Accumulated Deficit
|
Accumulated
Other Comprehensive Loss |
Total Madison Square Garden Entertainment Corp. Stockholders
’
Equity
|
Nonredeemable
Noncontrolling Interests |
Total Equity
|
Redeemable Noncontrolling Interests
|
||||||||||||||||||||||||||||
|
Balance as of June 30, 2018
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||
|
Adoption of ASU No. 2016-01
|
—
|
|
(
|
)
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||||||||
|
Adoption of ASC 606
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Net loss
|
—
|
|
(
|
)
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(4,945
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
||||||||||||||||||
|
Comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Net increase in Madison Square Garden Sports Corp. Investment
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Distributions to noncontrolling interest holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
|
Contribution of joint venture interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
—
|
|
||||||||||||||||||
|
Adjustments to noncontrolling interests
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
(
|
)
|
—
|
|
—
|
|
||||||||||||||||||
|
Balance as of June 30, 2019
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||
|
See accompanying notes to consolidated and combined financial statements.
|
||||||||||||||||||||||||||||||||||||
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
|
||||||||||||||||||||||||||||||||||||
|
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
|
||||||||||||||||||||||||||||||||||||
|
AND REDEEMABLE NONCONTROLLING INTERESTS (Continued)
|
||||||||||||||||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||
|
Common
Stock Issued |
MSG Sports Corp.’s Investment
|
Additional
Paid-In Capital |
Retained Earnings
|
Accumulated
Other Comprehensive Loss |
Total Madison Square Garden Entertainment Corp. Stockholders
’
Equity
|
Nonredeemable
Noncontrolling Interests |
Total Equity
|
Redeemable Noncontrolling Interests
|
||||||||||||||||||||||||||||
|
Balance as of June 30, 2019
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||
|
Net income (loss)
|
—
|
|
(
|
)
|
—
|
|
|
|
—
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||
|
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
||||||||||||||||||
|
Comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||
|
Noncontrolling interests, non-cash acquisition
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
(
|
)
|
||||||||||||||||||
|
Redeemable noncontrolling interest adjustment to redemption fair value
|
—
|
|
(
|
)
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
—
|
|
(
|
)
|
|
|
||||||||||||||||||
|
Net increase in Madison Square Garden Sports Corp. Investment
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Adjustments related to the transfer of certain assets and liabilities as a result of the Entertainment Distribution
|
—
|
|
|
|
—
|
|
—
|
|
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Conversion of Madison Square Garden Sports Corp. Investment
|
|
|
(
|
)
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Share-based compensation
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||||||||||||||||
|
Tax withholding associated with shares issued for equity-based compensation
|
—
|
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
—
|
|
(
|
)
|
—
|
|
||||||||||||||||||
|
Contributions from noncontrolling interest holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
—
|
|
||||||||||||||||||
|
Distributions to noncontrolling interest holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
—
|
|
||||||||||||||||||
|
Accretion of put options
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
||||||||||||||||||
|
Balance as of June 30, 2020
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||
|
•
|
We have revised our process and construction schedule for MSG Sphere, providing for a substantially reduced spend in fiscal year 2021 and a lengthened timetable that enables the Company to preserve cash in the near-term. We now expect to open MSG Sphere in Las Vegas in
calendar year 2023
;
|
|
•
|
In connection with our extended construction timeline, we have reduced our expected near-term spending on technology and content development for MSG Sphere;
|
|
•
|
At the end of May, we ended all financial support that was previously provided for certain event-level employees at the Company’s performance venues, and as a result virtually all venue employees, approximately
|
|
•
|
At the end of March, Tao Group Hospitality eliminated essentially all of its venue line staff and manager positions with limited numbers of employees returning as operations slowly resume. In August, Tao Group Hospitality reduced its corporate workforce;
|
|
•
|
In August, we reduced our regular full-time workforce by approximat
ely
|
|
•
|
We have implemented and are continuing to pursue additional comprehensive cost reduction measures, including terminating certain third-party services, negotiating reduced rates and/or reduced service levels with third parties, and pursuing targeted savings and reductions in spending marketing and travel and entertainment, and deferring or limiting non-essential operating or other discretionary expenses.
|
|
•
|
The Company is having conversations with landlords and other vendors about relief from cash payments, some of which may not be successful; and
|
|
•
|
We are actively pursuing potential financing options, including incurring up to
$
|
|
•
|
Level I — Quoted prices for identical instruments in active markets.
|
|
•
|
Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
|
•
|
Level III — Instruments whose significant value drivers are unobservable.
|
|
Year ended June 30, 2020
|
||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Eliminations
|
Total
|
|||||||||||||
|
Event-related and entertainment dining and nightlife offerings
(a)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Sponsorship, signage and suite licenses
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Other
(b)
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Total revenues from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Year ended June 30, 2019
|
||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Eliminations
|
Total
|
|||||||||||||
|
Event-related and entertainment dining and nightlife offerings
(a)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Sponsorship, signage and suite licenses
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Other
(b)
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Total revenues from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
(a)
|
Consists of (i) ticket sales and other ticket-related revenues, (ii) Tao Group Hospitality’s entertainment dining and nightlife offerings, (iii) venue license fees from third-party promoters, and (iv) food, beverage and merchandise sales. Event-related revenues and entertainment, dining and nightlife offerings are recognized at a point in time. As such, these revenues have been included in the same category in the table above.
|
|
(b)
|
Primarily consists of (i) advertising commission revenue from MSG Networks and MSG Sports and (ii) Tao Group Hospitality’s managed venue revenues. The Company’s other revenues also included revenues from Obscura Digital’s
|
|
Year ended June 30, 2020
|
||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Eliminations
|
Total
|
|||||||||||||
|
Ticketing and venue license fee revenues
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Sponsorship and signage, suite, and advertising commission / agency revenues
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Revenues from entertainment dining and nightlife offerings
(b)
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Food, beverage and merchandise revenues
|
|
|
|
|
|
|
|
|
||||||||
|
Other
(c)
|
|
|
|
|
|
|
|
|
||||||||
|
Total revenues from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Year ended June 30, 2019
|
||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Eliminations
|
Total
|
|||||||||||||
|
Ticketing and venue license fee revenues
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Sponsorship and signage, suite, and advertising commission revenues
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Revenues from entertainment dining and nightlife offerings
(b)
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Food, beverage and merchandise revenues
|
|
|
|
|
|
|
|
|
||||||||
|
Other
(c)
|
|
|
|
|
|
|
|
|
||||||||
|
Total revenues from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Year ended June 30, 2018
|
||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Eliminations
|
Total
|
|||||||||||||
|
Ticketing and venue license fee revenues
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Sponsorship and signage, suite, and advertising commission revenues
|
|
|
|
|
(
|
)
|
|
|
||||||||
|
Revenues from entertainment dining and nightlife offerings
(b)
|
|
|
|
|
|
|
|
|
||||||||
|
Food, beverage and merchandise revenues
|
|
|
|
|
|
|
|
|
||||||||
|
Other
(c)
|
|
|
|
|
|
|
|
|
||||||||
|
Total revenues from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
(a)
|
Amounts include ticket sales, including other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) the presentation of the Christmas Spectacular, and (iii) other live entertainment and sporting events. In
|
|
(b)
|
Primarily consist of revenues from (i) entertainment dining and nightlife offerings and (ii) venue management agreements.
|
|
(c)
|
Amounts include revenues from Obscura’s third-party production business, which decreased significantly for
Fiscal Year
2020
as compared to the prior year periods due to the Company’s decision to wind down Obscura’s third-party production business to focus those resources on the MSG Sphere development.
|
|
June 30,
|
||||||||
|
2020
|
2019
|
|||||||
|
Receivables from contracts with customers, net
(a)
|
$
|
|
|
$
|
|
|
||
|
Contract assets, current
(b)
|
|
|
|
|
||||
|
Deferred revenue, including non-current portion
(c)
|
|
|
|
|
||||
|
(a)
|
Receivables from contracts with customers, which are reported in Accounts receivable, net and Net related party receivables in the Company’s consolidated and combined balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of
June 30, 2020
and
2019
, the Company’s receivables from contracts with customers above included
$
|
|
(b)
|
Contract assets, which are reported as Other current assets in the Company’s consolidated and combined balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to the customer, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.
|
|
(c)
|
Deferred revenue primarily relates to the Company’s receipt of consideration from a customer in advance of the Company’s transfer of goods or services to that customer. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to the customer. Revenue recognized for the year ended
June 30, 2020
relating to the deferred revenue balance as of
June 30, 2019
was
$
|
|
Fiscal year ending June 30, 2021
|
$
|
|
|
|
|
Fiscal year ending June 30, 2022
|
|
|
||
|
Fiscal year ending June 30, 2023
|
|
|
||
|
Fiscal year ending June 30, 2024
|
|
|
||
|
Fiscal year ending June 30, 2025
|
|
|
||
|
Thereafter
|
|
|
||
|
$
|
|
|
||
|
|
Years Ended June 30,
|
||||||||
|
|
2020
|
2019
|
2018
|
||||||
|
Weighted-average shares (denominator):
|
|||||||||
|
Weighted-average shares for basic EPS
(a)
|
|
|
|
|
|
|
|||
|
Dilutive effect of shares issuable under share-based compensation plans
|
|
|
|
|
|
|
|||
|
Weighted-average shares for diluted EPS
(a)
|
|
|
|
|
|
|
|||
|
Weighted-average anti-dilutive shares
|
|
|
|
|
|
|
|||
|
(a)
|
|
|
As of
|
||||||||||||||||
|
June 30,
2020 |
June 30,
2019 |
June 30,
2018 |
June 30,
2017 |
|||||||||||||
|
Captions on the consolidated and combined balance sheets:
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Restricted cash
(a)
|
|
|
|
|
|
|
|
|
||||||||
|
Cash, cash equivalents and restricted cash on the consolidated and combined statements of cash flows
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
(a)
|
|
|
Ownership Percentage
|
Investment
|
Loan
|
Total
|
|||||||||||
|
June 30, 2020
|
||||||||||||||
|
Equity method investments:
|
||||||||||||||
|
SACO Technologies Inc. (“SACO”)
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Others
|
|
|
|
—
|
|
|
|
|||||||
|
Equity investments without readily determinable fair values
(a) (d)
|
|
|
|
|
|
|
||||||||
|
Total investments and loans to nonconsolidated affiliates
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||
|
June 30, 2019
|
||||||||||||||
|
Equity method investments:
|
||||||||||||||
|
SACO
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Tribeca Enterprises LLC (“Tribeca Enterprises”)
(b)
|
|
|
|
|
|
|
|
|||||||
|
Others
|
|
|
|
|
|
|
|
|||||||
|
Equity investments without readily determinable fair values
(a) (c) (d)
|
|
|
|
|
|
|
||||||||
|
Total investments and loans to nonconsolidated affiliates
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||
|
(a)
|
In accordance with the ASC Topic 321, Investments - Equity Securities, the Company applies the measurement alternative to its equity investments without readily determinable fair values.
Under the measurement alternative, equity securities without readily determinable fair values are accounted for at cost, adjusted for impairment and changes resulting from observable price fluctuations in orderly transactions for the identical or a similar investment of the same issuer, which is classified within Level III of the fair value hierarchy. For
Fiscal Year
2020
, the Company recorded an impairment charge of
$
|
|
(b)
|
On
August 5, 2019
, immediately prior to the sale of the Company’s equity capital in
Tribeca Enterprises
for
$
|
|
(c)
|
As of June 30, 2019, the Company’s equity investment in equity without readily determinable fair value included a
$
|
|
(d)
|
The following tables summarize the changes in the Company’s equity investments without readily determinable fair values for which the Company has used Level III inputs to determine fair value:
|
|
Balance, beginning of period
|
$
|
|
|
|
|
Transfer out of Level III to Level I for investment in DraftKings
|
(
|
)
|
||
|
Impairment charge
|
(
|
)
|
||
|
Balance, end of period
|
$
|
|
|
|
|
Balance as of June 30, 2020
|
|||||||||||
|
Equity Investment with Readily Determinable Fair Values
|
Units / Shares Held
|
Cost Basis
|
Carrying value
/ Fair value
|
||||||||
|
Townsquare common stock
|
|
|
$
|
|
|
$
|
|
|
|||
|
DraftKings common stock
|
|
|
|
|
|
|
|||||
|
DraftKings warrant
|
|
|
|
|
|
|
|||||
|
Total
|
$
|
|
|
$
|
|
|
|||||
|
Balance as of June 30, 2019
|
|||||||||||
|
Equity Investment with Readily Determinable Fair Value
|
Units / Shares Held
|
Cost Basis
|
Carrying value
/ fair value
|
||||||||
|
Townsquare common stock
|
|
|
$
|
|
|
$
|
|
|
|||
|
Total
|
$
|
|
|
$
|
|
|
|||||
|
The following is summarized financial information for all of the Company’s equity method investments as required by the guidance in SEC Regulation S-X Rule 4-08(g). The amounts shown below represent 100% of these equity method investments’ financial position and results of operations.
|
||||||||
|
As of
|
||||||||
|
Balance Sheet
(a)
|
June 30,
2020 |
June 30, 2019
|
||||||
|
Current assets
|
$
|
|
|
$
|
|
|
||
|
Noncurrent assets
|
|
|
|
|
||||
|
$
|
|
|
$
|
|
|
|||
|
Current liabilities
|
$
|
|
|
$
|
|
|
||
|
Noncurrent liabilities
|
|
|
|
|
||||
|
Noncontrolling interests
|
|
|
|
|
||||
|
Shareholders’ equity
|
|
|
|
|
||||
|
$
|
|
|
$
|
|
|
|||
|
Years Ended June 30,
|
||||||||||||
|
Results of Operations
(a)
|
2020
|
2019
(a)
|
2018
|
|||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Income (loss) from continuing operations
|
(
|
)
|
|
|
(
|
)
|
||||||
|
Net income (loss)
|
(
|
)
|
|
|
(
|
)
|
||||||
|
Net income (loss) attributable to controlling interest
|
(
|
)
|
|
|
(
|
)
|
||||||
|
(a)
|
|
|
June 30,
2020
(a)
|
June 30,
2019 |
Estimated Useful Lives
|
||||||||||
|
Land
|
$
|
|
|
$
|
|
|
||||||
|
Buildings
|
|
|
|
|
Up to
|
|
||||||
|
Equipment
|
|
|
|
|
|
to
|
|
|||||
|
Aircraft
|
|
|
|
|
|
|||||||
|
Furniture and fixtures
|
|
|
|
|
|
to
|
|
|||||
|
Leasehold improvements
|
|
|
|
|
Shorter of term of lease or life of improvement
|
|||||||
|
Construction in progress
|
|
|
|
|
||||||||
|
|
|
|
|
|||||||||
|
Less accumulated depreciation and amortization
(b)
|
(
|
)
|
(
|
)
|
||||||||
|
$
|
|
|
$
|
|
|
|||||||
|
(a)
|
In connection with the execution of the MIPA on March 24, 2020, and subsequent sale of the Forum in Inglewood to CAPSS LLC (see Note
3
) on
May 1, 2020
, the Company disposed of
$
|
|
(b)
|
During
Fiscal Year
2020
, the Company recorded a non-cash impairment charge of
$
|
|
Line Item in the Company’s Consolidated Balance Sheet
|
||||||
|
Right-of-use assets:
|
||||||
|
Operating leases
|
Right-of-use lease assets
|
$
|
|
|
||
|
Lease liabilities:
|
||||||
|
Operating leases, current
|
Operating lease liabilities, current
|
$
|
|
|
||
|
Operating leases, noncurrent
|
Operating lease liabilities, noncurrent
|
|
|
|||
|
Total lease liabilities
|
$
|
|
|
|||
|
Line Item in the Company’s Consolidated and Combined Statement of Operations
|
||||||
|
Operating lease cost
|
Direct operating expenses
|
$
|
|
|
||
|
Operating lease cost
|
Selling, general and administrative expenses
|
|
|
|||
|
Short-term lease cost
|
Direct operating expenses
|
|
|
|||
|
Variable lease cost
|
Direct operating expenses
|
|
|
|||
|
Variable lease cost
|
Selling, general and administrative expenses
|
|
|
|||
|
Total lease cost
|
$
|
|
|
|||
|
Fiscal year ending June 30, 2021
|
$
|
|
|
|
|
Fiscal year ending June 30, 2022
|
|
|
||
|
Fiscal year ending June 30, 2023
|
|
|
||
|
Fiscal year ending June 30, 2024
|
|
|
||
|
Fiscal year ending June 30, 2025
|
|
|
||
|
Thereafter
|
|
|
||
|
Total lease payments
|
|
|
||
|
Less imputed interest
|
|
|
||
|
Total lease liabilities
(a)
|
$
|
|
|
|
|
(a)
|
Operating lease payments exclude minimum lease payments related to a location associated with the entertainment dining and nightlife offerings as the Company has not yet taken possession of the space.
|
|
Entertainment
|
Tao Group Hospitality
|
Total
|
||||||||||
|
Balance as of June 30, 2018
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Acquisition of BCE
|
|
|
|
|
|
|
||||||
|
Acquisition of Obscura
|
|
|
|
|
|
|
||||||
|
Balance as of June 30, 2019
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Allocation to the assets held for sale, subsequently sold
(a)
|
(
|
)
|
|
|
(
|
)
|
||||||
|
Goodwill impairment
(b)
|
|
|
(
|
)
|
(
|
)
|
||||||
|
Balance as of June 30, 2020
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
(a)
|
In connection with the execution of the MIPA on March 24, 2020, pursuant to which the Company agreed to sell the Forum in Inglewood to CAPSS LLC (see Note
3
), the Company allocated
$
|
|
(b)
|
During the first quarter of
Fiscal Year
2020
, the Company performed its annual impairment test of goodwill and determined that there were
|
|
June 30,
2020 |
June 30,
2019 |
|||||||
|
Trademarks
(a)
|
|
|
|
|
||||
|
Photographic related rights
(b)
|
|
|
|
|
||||
|
$
|
|
|
$
|
|
|
|||
|
(a)
|
In connection with the execution of the MIPA on March 24, 2020, pursuant to which the Company agreed to sell the Forum in Inglewood to CAPSS LLC (see Note
3
), the Company reclassified
$
|
|
(b)
|
The decrease was due to a balance transfer of photographic related rights to
MSG Sports
made in connection with the
Entertainment Distribution
.
|
|
June 30, 2020
|
Estimated Useful Lives
|
Gross
|
Accumulated
Amortization
|
Net
|
||||||||||||
|
Trade names
(a)
|
|
to
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Venue management contracts
|
|
to
|
|
|
|
(
|
)
|
|
|
|||||||
|
Favorable lease assets
(b)
|
|
|
|
|
|
|
|
|
|
|||||||
|
Non-compete agreements
|
|
|
|
|
|
(
|
)
|
|
|
|||||||
|
Festival rights
|
|
|
|
(
|
)
|
|
|
|||||||||
|
Other intangibles
(c)
|
|
|
|
|
|
(
|
)
|
|
|
|||||||
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||||
|
June 30, 2019
|
Gross
|
Accumulated
Amortization
|
Net
|
|||||||||||
|
Trade names
(a)
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||
|
Venue management contracts
|
|
|
|
(
|
)
|
|
|
|||||||
|
Favorable lease assets
(b)
|
|
|
|
(
|
)
|
|
|
|||||||
|
Non-compete agreements
|
|
|
(
|
)
|
|
|
||||||||
|
Festival rights
|
|
|
(
|
)
|
|
|
||||||||
|
Other intangibles
(c)
|
|
|
(
|
)
|
|
|
||||||||
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
|
(a)
|
During
Fiscal Year
2020
, the Company recorded a non-cash impairment charge of
$
|
|
(b)
|
Upon adoption of ASC Topic 842, the Company reclassified favorable lease assets net balance of
$
|
|
(c)
|
The decreases in the Other intangibles gross and accumulated amortization balances related to the retirement of an Obscura asset after it was fully amortized on an accelerated basis.
|
|
Fiscal year ending June 30, 2021
|
$
|
|
|
|
Fiscal year ending June 30, 2022
|
$
|
|
|
|
Fiscal year ending June 30, 2023
|
$
|
|
|
|
Fiscal year ending June 30, 2024
|
$
|
|
|
|
Fiscal year ending June 30, 2025
|
$
|
|
|
|
Off-Balance Sheet
Commitments
|
On-Balance Sheet Commitments
|
|||||||||||||||||||||||||||
|
Contractual
Obligations
|
Letters of
Credits
(a)
|
Total
(b)
|
Leases
(c)
|
Debt Repayments
(d)
|
Other
(e)
|
Total
(f) (g)
|
||||||||||||||||||||||
|
Fiscal year ending June 30, 2021
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||
|
Fiscal year ending June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Fiscal year ending June 30, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Fiscal year ending June 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Fiscal year ending June 30, 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Thereafter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||||||
|
(a)
|
Consists of letters of credit obtained by the Company as collateral for development of MSG Sphere in Las Vegas and lease agreements of the Company and Tao Group Hospitality.
|
|
(b)
|
Off balance sheet arrangements disclosed in the table above do not include MSG Sphere related commitments of approximately
$
|
|
(c)
|
Includes contractually obligated minimum lease payments for operating leases having an initial noncancelable term in excess of one year for the Company’s venues, including the Tao Group Hospitality venues and various corporate offices. These commitments are presented exclusive of the imputed interest used to reflect the payment’s present value.
See
Note
9
for more information.
|
|
(d)
|
See Note
13
for more information surrounding the principal repayments required under the
Tao Senior Secured Credit Facilities
and
a note with respect to a loan received by BCE from its noncontrolling interest holder that is due in April 2021
.
|
|
(e)
|
Includes MSG Sphere related commitments of approximately
$
|
|
(f)
|
Pension obligations have been excluded from the table above as the timing of the future cash payments is uncertain.
See Note
14
for information on the future funding requirements under our pension obligations.
|
|
(g)
|
In connection with the
Entertainment Distribution
, the Company entered into delayed draw term loan credit agreements with subsidiaries of
MSG Sports
(“
DDTL Facilities
”). Pursuant to the
DDTL Facilities
, two of
MSG Sports
’ subsidiaries, MSG NYK Holdings, LLC and MSG NYR Holdings, LLC, may draw up to
$
|
|
Fair Value Hierarchy
|
June 30,
|
|||||||||
|
2020
|
2019
|
|||||||||
|
Assets:
|
||||||||||
|
Commercial paper
|
I
|
$
|
|
|
$
|
|
|
|||
|
Money market accounts
|
I
|
|
|
|
|
|||||
|
Time deposits
|
I
|
|
|
|
|
|||||
|
U.S. treasury bills
|
I
|
|
|
|
|
|||||
|
Equity investment with readily determinable fair value
|
I
|
|
|
|
|
|||||
|
Total assets measured at fair value
|
$
|
|
|
$
|
|
|
||||
|
June 30, 2020
|
June 30, 2019
|
|||||||||||||||
|
Carrying
Value
|
Fair
Value
|
Carrying
Value |
Fair
Value |
|||||||||||||
|
Assets
|
||||||||||||||||
|
Notes receivable, including interest accruals
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Short-term investments
(a)
|
|
|
|
|
|
|
|
|
||||||||
|
Equity investment with readily determinable fair value
(b)
|
|
|
|
|
|
|
|
|
||||||||
|
Subordinated term loan receivable
(c)
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities
|
||||||||||||||||
|
Long-term debt, including current portion
(d)
|
|
|
|
|
|
|
|
|
||||||||
|
(a)
|
The Company’s notes receivable are invested with banking institutions as collateral for issuances of letters of credit. In addition, the Company’s short-term investments consist of investments that (i) have original maturities of greater than three months and (ii) can be converted into cash by the Company within one year. As of
June 30, 2020
, the Company’s short-term investments included
$
|
|
(b)
|
See Note
7
.
Investments and Loans to Nonconsolidated Affiliates
—
Equity Investment with Readily Determinable Fair Value
for more information on the Company’s equity investment with readily determinable fair value.
|
|
(c)
|
In connection with the sale of the Company’s joint venture interest in AMSGE in December 2018, the
$
|
|
(d)
|
On May 23, 2019, Tao Group Intermediate Holdings LLC and Tao Group Operating LLC entered into a
$
|
|
Balance as of June 30, 2018
|
$
|
|
|
|
|
Change in fair value of contingent consideration
(a)
|
(
|
)
|
||
|
Balance as of June 30, 2019
|
$
|
|
|
|
|
Change in fair value of contingent consideration
(a)
|
(
|
)
|
||
|
Balance as of June 30, 2020
|
$
|
|
|
|
|
(a)
|
The change in fair value of contingent consideration was recorded within Selling, general and administrative expenses in the accompanying consolidated and combined statements of operations for the years ended
June 30, 2020
and
2019
, respectively.
|
|
Fiscal year ending June 30, 2021
|
$
|
|
|
|
Fiscal year ending June 30, 2021
(a)
|
|
|
|
|
Fiscal year ending June 30, 2023
|
|
|
|
|
Fiscal year ending June 30, 2024
|
|
|
|
|
Fiscal year ending June 30, 2025
|
|
|
|
|
Thereafter
|
|
|
|
|
(a)
|
See
Business Combinations and Noncontrolling Interests
section under Note
2
.
Summary of Significant Accounting Policies
for further discussion on consolidation of
Tao Group Hospitality
. In addition, the long-term debt maturities reported above did not include
$
|
|
June 30, 2020
|
||||||||||||
|
Tao Term Loan Facility
|
Deferred Financing Costs
(b)
|
Total
|
||||||||||
|
Current portion of long-term debt, net of deferred financing costs
(a)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
Long-term debt, net of deferred financing costs
|
|
|
(
|
)
|
|
|
||||||
|
Total
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
June 30, 2019
|
||||||||||||
|
Tao Term Loan Facility
|
Deferred Financing Costs
(b)
|
Total
|
||||||||||
|
Current portion of long-term debt, net of deferred financing costs
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
Long-term debt, net of deferred financing costs
(a)
|
|
|
(
|
)
|
|
|
||||||
|
Total
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
(a)
|
In addition to the outstanding balance associated with the
Tao Term Loan Facility
disclosed above, the Company’ s Current portion of long-term debt, net of deferred finan
cing costs of
$
|
|
(b)
|
|
|
June 30,
2020 |
June 30,
2019 |
|||||||
|
Other current assets
|
$
|
|
|
$
|
|
|
||
|
Other assets
|
|
|
|
|
||||
|
|
Pension Plans
|
Postretirement Plan
|
|||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
|
Change in benefit obligation:
|
|||||||||||||||
|
Benefit obligation at beginning of period
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Service cost
|
|
|
|
|
|
|
|
|
|||||||
|
Interest cost
|
|
|
|
|
|
|
|
|
|||||||
|
Actuarial loss (gain)
|
|
|
|
|
|
|
(
|
)
|
|||||||
|
Benefits paid
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
|
Plan settlements paid
|
(
|
)
|
(
|
)
|
—
|
|
—
|
|
|||||||
|
Other
|
(
|
)
|
|
|
|
|
(
|
)
|
|||||||
|
Transfer of liabilities
(a)
|
(
|
)
|
|
|
—
|
|
|
|
|||||||
|
Benefit obligation at end of period
|
|
|
|
|
|
|
|
|
|||||||
|
Change in plan assets:
|
|||||||||||||||
|
Fair value of plan assets at beginning of period
|
|
|
|
|
—
|
|
—
|
|
|||||||
|
Actual return on plan assets
|
|
|
|
|
—
|
|
—
|
|
|||||||
|
Employer contributions
|
|
|
|
|
—
|
|
—
|
|
|||||||
|
Benefits paid
|
(
|
)
|
(
|
)
|
—
|
|
—
|
|
|||||||
|
Plan settlements paid
|
|
|
(
|
)
|
—
|
|
—
|
|
|||||||
|
Fair value of plan assets at end of period
|
|
|
|
|
—
|
|
—
|
|
|||||||
|
Funded status at end of period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
(a)
|
Represents the benefit obligation related to the MSG Sports Non-Qualified Plans as of April 17, 2020, the date of the Entertainment Distribution.
|
|
|
Pension Plans
|
Postretirement Plan
|
|||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
|
Current liabilities (included in accrued employee related costs)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Non-current liabilities (included in defined benefit and other postretirement obligations)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
|
Pension Plans
|
Postretirement Plan
|
|||||||||||||
|
|
June 30,
|
June 30,
|
|||||||||||||
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
Actuarial loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Pension Plans
|
Postretirement Plan
|
|||||||||||||||||||||||
|
Years Ended June 30,
|
Years Ended June 30,
|
|||||||||||||||||||||||
|
2020
|
2019
|
2018
|
2020
|
2019
|
2018
|
|||||||||||||||||||
|
Service cost
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||||
|
Interest cost
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Expected return on plan assets
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
||||||||||||
|
Recognized actuarial loss
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Amortization of unrecognized prior service cost (credit)
|
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||
|
Settlement loss recognized
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Other
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||||
|
Net periodic benefit cost
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
|
Contributory charge to Madison Square Garden Sports Corp. for participation in the Shared Plans and all allocation of costs related to the corporate employees
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||
|
Net periodic benefit cost reported in the consolidated and combined statements of operations
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
||||||
|
(a)
|
For the years ended
June 30, 2020
,
2019
and
2018
, lump-sum payments totaling
$
|
|
|
Pension Plans
|
Postretirement Plan
|
|||||||||||||||||||||
|
Years Ended June 30,
|
Years Ended June 30,
|
||||||||||||||||||||||
|
|
2020
|
2019
|
2018
|
2020
|
2019
|
2018
|
|||||||||||||||||
|
Actuarial gain (loss), net
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
|||||
|
Recognized actuarial loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Recognized prior service credit
|
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||
|
Settlement loss recognized
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total recognized in other comprehensive income (loss)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
|||||
|
|
Pension Plans
|
Postretirement Plan
|
|||||||||
|
June 30,
|
June 30,
|
||||||||||
|
|
2020
|
2019
|
2020
|
2019
|
|||||||
|
Discount rate
|
|
%
|
|
%
|
|
%
|
|
%
|
|||
|
Healthcare cost trend rate assumed for next year
|
n/a
|
|
n/a
|
|
|
%
|
|
%
|
|||
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
n/a
|
|
n/a
|
|
|
%
|
|
%
|
|||
|
Year that the rate reaches the ultimate trend rate
|
n/a
|
|
n/a
|
|
2027
|
|
2027
|
|
|||
|
|
Pension Plans
|
Postretirement Plan
|
|||||||||||||||
|
Years Ended June 30,
|
Years Ended June 30,
|
||||||||||||||||
|
|
2020
|
2019
|
2018
|
2020
|
2019
|
2018
|
|||||||||||
|
Discount rate - projected benefit obligation
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|||||
|
Discount rate - service cost
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|||||
|
Discount rate - interest cost
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|||||
|
Expected long-term return on plan assets
|
|
%
|
|
%
|
|
%
|
n/a
|
|
n/a
|
|
n/a
|
|
|||||
|
Healthcare cost trend rate assumed for next year
|
n/a
|
|
n/a
|
|
n/a
|
|
|
%
|
|
%
|
|
%
|
|||||
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
n/a
|
|
n/a
|
|
n/a
|
|
|
%
|
|
%
|
|
%
|
|||||
|
Year that the rate reaches the ultimate trend rate
|
n/a
|
|
n/a
|
|
n/a
|
|
2027
|
|
2027
|
|
2027
|
|
|||||
|
|
Increase (Decrease) in Total of Service and Interest Cost Components for the
|
Increase (Decrease) in Benefit Obligation at
|
|||||||||||||||||
|
Years Ended June 30,
|
June 30,
|
||||||||||||||||||
|
|
2020
|
2019
|
2018
|
2020
|
2019
|
||||||||||||||
|
One percentage point increase
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
One percentage point decrease
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
|
June 30,
|
|||||
|
Asset Classes
(a)
:
|
2020
|
2019
|
|||
|
Fixed income securities
|
|
%
|
|
%
|
|
|
Cash equivalents
|
|
%
|
|
%
|
|
|
|
%
|
|
%
|
||
|
(a)
|
The Company’s target allocation for pension plan assets is
|
|
Fair Value Hierarchy
|
June 30,
|
|||||||||
|
2020
|
2019
|
|||||||||
|
Fixed income securities:
|
||||||||||
|
U.S. Treasury securities
|
I
|
$
|
|
|
$
|
|
|
|||
|
U.S. corporate bonds
|
II
|
|
|
|
|
|||||
|
Foreign issued corporate bonds
|
II
|
|
|
|
|
|||||
|
Municipal bonds
|
II
|
|
|
|
|
|||||
|
Money market accounts
|
I
|
|
|
|
|
|||||
|
Mutual funds
|
II
|
|
|
|
|
|||||
|
Total investments measured at fair value
|
|
$
|
|
|
$
|
|
|
|||
|
Pension
Plans
|
Postretirement
Plan
|
||||||
|
Fiscal year ending June 30, 2021
|
$
|
|
|
$
|
|
|
|
|
Fiscal year ending June 30, 2022
|
|
|
|
|
|||
|
Fiscal year ending June 30, 2023
|
|
|
|
|
|||
|
Fiscal year ending June 30, 2024
|
|
|
|
|
|||
|
Fiscal year ending June 30, 2025
|
|
|
|
|
|||
|
Fiscal years ending June 30, 2026 – 2029
|
|
|
|
|
|||
|
•
|
Assets contributed to a multiemployer defined benefit pension plan by one employer may be used to provide benefits to employees of other participating employers.
|
|
•
|
If a participating employer stops contributing to a multiemployer defined benefit pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
|
•
|
If the Company chooses to stop participating in some of these multiemployer defined benefit pension plans, the Company may be required to pay those plans an amount based on the Company’s proportion of the underfunded status of the plan, referred to as a withdrawal liability. However, cessation of participation in a multiemployer defined benefit pension plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process.
|
|
PPA Zone Status
|
FIP/RP Status Pending / Implemented
|
Madison Square Garden Contributions
|
|||||||||||||||||||||||
|
As of June 30,
|
Years Ended June 30,
|
||||||||||||||||||||||||
|
Plan Name
|
EIN
|
Pension Plan Number
|
2020
|
2019
|
2020
|
2019
|
2018
|
Surcharge Imposed
|
Expiration Date of CBA
|
||||||||||||||||
|
Pension Fund of Local No. 1 of I.A.T.S.E.
|
|
|
Green
as of 12/31/2018 |
Green
as of 12/31/2017 |
|
$
|
|
|
$
|
|
|
$
|
|
|
|
6/30/2020 - 5/1/2023
|
|||||||||
|
All Other Multiemployer Defined Benefit Pension Plans
|
|
|
|
|
|
|
|||||||||||||||||||
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||||||||||||||
|
Fund Name
|
Year Contributions to Plan Exceeded
5 Percent of Total Contributions
(As of Plan’s Year-End)
|
|
Pension Fund of Local No. 1 of I.A.T.S.E
|
December 31, 2018, 2017 and 2016
|
|
32BJ/Broadway League Pension Fund
|
December 31, 2018, 2017 and 2016
|
|
Treasurers and Ticket Sellers Local 751 Pension Fund
|
August 31, 2018, 2017 and 2016
|
|
I.A.T.S.E Local No. 33 Pension Trust Fund
|
December 31, 2018, 2017 and 2016
|
|
Years Ended June 30,
|
||||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Nonperformance and performance based RSUs
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Stock options
|
|
|
|
|
|
|
||||||
|
Total share-based compensation expense
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
(a)
|
The share-based compensation expense reported for Fiscal Year 2018 includes expense associated with MSG Networks’ RSUs granted to the Company’s employees prior to the spin-off of MSG Sports from MSG Networks in 2015.
|
|
|
Number of
|
Weighted-Average
Fair Value
Per Share At
Date of Grant
|
|||||||
|
|
Nonperformance
Based
Vesting
RSUs
|
Performance
Based
Vesting
RSUs |
|||||||
|
Unvested award balance as of April 17, 2020
|
|
|
|
|
$
|
|
|
||
|
Granted
|
|
|
|
|
$
|
|
|
||
|
Vested
|
(
|
)
|
(
|
)
|
$
|
|
|
||
|
Forfeited
|
(
|
)
|
(
|
)
|
$
|
|
|
||
|
Unvested award balance as of June 30, 2020
|
|
|
|
|
$
|
|
|
||
|
Number of
|
Weighted-Average Exercise Price Per Share
|
Weighted-Average Remaining Contractual Term (In Years)
|
Aggregate Intrinsic Value
|
|||||||||
|
Time Vesting Options
|
||||||||||||
|
Balance as of April 17, 2020
|
|
|
$
|
|
|
|
||||||
|
Granted
|
|
|
$
|
|
|
|||||||
|
Balance as of June 30, 2020
|
|
|
$
|
|
|
|
$
|
|
|
|||
|
Exercisable as of June 30, 2020
|
|
|
$
|
|
|
|
$
|
|
|
|||
|
Pension Plans and
Postretirement
Plan
|
Cumulative Translation Adjustments
|
Accumulated
Other
Comprehensive
Loss
|
|||||||||
|
Balance as of June 30, 2019
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Other comprehensive loss before reclassifications
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||
|
Amounts reclassified from accumulated other comprehensive loss
(a)
|
|
|
|
|
|
|
|||||
|
Other comprehensive income (loss)
|
|
|
(
|
)
|
(
|
)
|
|||||
|
Adjustment related to the transfer of Pension Plans and Postretirement Plan liabilities as a result of the Entertainment Distribution
|
|
|
|
|
|
|
|||||
|
Balance as of June 30, 2020
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Pension Plans and
Postretirement
Plan
|
Cumulative Translation Adjustments
|
Unrealized Loss on Available-for-sale
Securities
(b)
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||||
|
Balance as of June 30, 2018
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Reclassification of unrealized loss on available-for sale securities
|
|
|
|
|
|
|
|
|
|||||||
|
Other comprehensive loss before reclassifications
|
(
|
)
|
(
|
)
|
—
|
|
(
|
)
|
|||||||
|
Amounts reclassified from accumulated other comprehensive loss
(a)
|
|
|
|
|
|
|
|
|
|||||||
|
Other comprehensive loss
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|||||||
|
Balance as of June 30, 2019
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
|||
|
Pension Plans and
Postretirement
Plan
|
Cumulative Translation Adjustments
|
Unrealized Gain (Loss) on Available-for-sale
Securities
(b)
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||||
|
Balance as of June 30, 2017
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
|||
|
Reclassification of stranded tax effects
(c)
|
|
|
|
|
|
|
|
|
|||||||
|
Other comprehensive loss before reclassifications
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
|
Amounts reclassified from accumulated other comprehensive loss
(a)
|
|
|
|
|
|
|
|
|
|||||||
|
Other comprehensive loss
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
|
Balance as of June 30, 2018
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
(a)
|
Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss and net unrecognized prior service credit included in net periodic benefit cost, which is reflected under
Miscellaneous income (expense), net
in the accompanying consolidated and combined statements of operations (see Note
14
).
|
|
(b)
|
As of July 1, 2018, upon adoption of ASU No. 2016-01, the Company recorded a transition adjustment to reclassify accumulated other comprehensive loss associated with its investment in Townsquare in the amount of
$
|
|
(c)
|
|
|
Years Ended June 30,
|
||||||||||||
|
|
2020
|
2019
|
2018
|
|||||||||
|
Current expense:
|
||||||||||||
|
Federal
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
State and other
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|||||||
|
Deferred expense (benefit):
|
||||||||||||
|
Federal
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
State and other
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
|
Income tax expense (benefit)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
|||
|
Years Ended June 30,
|
||||||||||||
|
|
2020
|
2019
|
2018
|
|||||||||
|
Federal tax expense (benefit) at statutory federal rate
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
State income taxes, net of federal benefit
|
|
|
|
|
(
|
)
|
||||||
|
Change in the estimated applicable tax rate used to determine deferred taxes
|
|
|
(
|
)
|
|
|
||||||
|
Nondeductible transaction costs
|
|
|
|
|
|
|
||||||
|
Federal tax credits
|
(
|
)
|
(
|
)
|
|
|
||||||
|
Impact of federal tax reform on deferred taxes
|
|
|
|
|
|
|
||||||
|
GAAP income of consolidated partnership attributable to non-controlling interest
|
|
|
|
|
|
|
||||||
|
Tax effect of indefinite intangible amortization
|
|
|
|
|
|
|
||||||
|
Change in valuation allowance
(a)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Nondeductible officers’ compensation
(b)
|
|
|
|
|
|
|
||||||
|
Nondeductible expenses
|
|
|
|
|
|
|
||||||
|
Excess tax benefit related to shared based-payments awards
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Other
|
|
|
|
|
|
|
||||||
|
Income tax expense (benefit)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
|||
|
(a)
|
For the year ended June 30, 2018, the valuation allowance was revalued under provisions contained in the TCJA, including a reduction in the valuation allowance of
$
|
|
(b)
|
The TCJA included changes to Internal Revenue Code Section 162(m), including elimination of the exception for qualified performance-based compensation over the
$1,000
annual limit. Accordingly, effective January 1, 2018, all compensation for certain officers in excess of
$1,000
is generally nondeductible.
|
|
June 30,
|
|||||||
|
|
2020
|
2019
|
|||||
|
Deferred tax asset:
|
|||||||
|
Net operating loss carryforwards
|
$
|
|
|
$
|
|
|
|
|
Tax credit carryforwards
|
|
|
|
|
|||
|
Accrued employee benefits
|
|
|
|
|
|||
|
Restricted stock units and stock options
|
|
|
|
|
|||
|
Deferred revenue
|
|
|
—
|
|
|||
|
Investments
|
|
|
|
|
|||
|
Other
|
|
|
|
|
|||
|
Total deferred tax assets
|
$
|
|
|
$
|
|
|
|
|
Less valuation allowance
|
(
|
)
|
(
|
)
|
|||
|
Net deferred tax assets
|
$
|
|
|
$
|
|
|
|
|
Deferred tax liabilities:
|
|||||||
|
Intangible and other assets
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
Property and equipment
|
(
|
)
|
(
|
)
|
|||
|
Prepaid expenses
|
(
|
)
|
(
|
)
|
|||
|
Investments
|
|
|
(
|
)
|
|||
|
Other
|
|
|
(
|
)
|
|||
|
Total deferred tax liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
Net deferred tax liability
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
•
|
Sponsorship sales and service representation agreements pursuant to which the Company has the exclusive right and obligation to sell
MSG Sports
’ sponsorships for an initial stated term of
|
|
•
|
Team sponsorship allocation agreement with
MSG Sports
, pursuant to which
MSG Sports
continues receiving an allocation of sponsorship and signage revenues associated with the sponsorship agreements that existed at the
Entertainment Distribution
Date;
|
|
•
|
Arena License Agreements pursuant to which the Company (i) provides
MSG Sports
the right to use The Garden for games of the Knicks and Rangers for a
|
|
•
|
Transition Services Agreement (the “
TSA
”) pursuant to which the Company provides certain corporate and other transition services to
MSG Sports
, such as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions, in exchange for service fees.
MSG Sports
also provides certain transition services to the Company, in exchange for service fees.
|
|
•
|
Sublease agreement, pursuant to which the Company subleases office space to
MSG Sports
;
|
|
•
|
Group ticket sales representation agreement, pursuant to which the Company appointed
MSG Sports
as its sales and service representative to sell group ticket packages related to Company events in exchange for a commission;
|
|
•
|
Single night rental commission agreement, pursuant to which
MSG Sports
may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual Company events in exchange for a commission;
|
|
•
|
The DDTL Facilities that provide for a
$
|
|
•
|
Aircraft time sharing agreements (discussed below); and;
|
|
•
|
Other agreements with
MSG Sports
entered into in connection with the Entertainment Distribution such as a distribution agreement, a tax disaffiliation agreement, an employee matters agreement, a trademark license agreement and certain other arrangements.
|
|
Years Ended June 30,
|
||||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Operating expenses (credits):
|
||||||||||||
|
Revenue sharing expenses
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
|
Allocation of charges for venue usage to MSG Sports
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Corporate general and administrative expenses, net — MSG Sports
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Corporate general and administrative expenses, net — MSG Networks
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Consulting fees
|
|
|
|
|
|
|
||||||
|
Advertising expenses
|
|
|
|
|
|
|
||||||
|
Other operating expenses, net
|
|
|
(
|
)
|
|
|
||||||
|
Year ended June 30, 2020
|
||||||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Purchase accounting adjustments
|
Inter-segment eliminations
|
Total
|
||||||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
—
|
|
$
|
(
|
)
|
$
|
|
|
|||||
|
Direct operating expenses
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impairment for intangibles, long-lived assets, and goodwill
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gain on disposal of assets held for sale
|
(
|
)
|
|
|
|
|
|
|
(
|
)
|
||||||||||
|
Operating income (loss)
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||
|
Loss in equity method investments
|
(
|
)
|
||||||||||||||||||
|
Interest income
|
|
|
||||||||||||||||||
|
Interest expense
|
(
|
)
|
||||||||||||||||||
|
Miscellaneous income, net
|
(a)
|
|
|
|||||||||||||||||
|
Loss from operations before income taxes
|
$
|
(
|
)
|
|||||||||||||||||
|
Reconciliation of operating income (loss) to adjusted operating income (loss):
|
||||||||||||||||||||
|
Operating income (loss)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Add back:
|
||||||||||||||||||||
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Impairment for intangibles, long-lived assets, and goodwill
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gain on disposal of assets held for sale
|
(
|
)
|
|
|
|
|
|
|
(
|
)
|
||||||||||
|
Other purchase accounting adjustments
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||
|
Adjusted operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Other information:
|
||||||||||||||||||||
|
Capital expenditures
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
—
|
|
$
|
|
|
|||||
|
Year ended June 30, 2019
|
||||||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Purchase accounting adjustments
|
Inter-segment eliminations
|
Total
|
||||||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
—
|
|
$
|
(
|
)
|
$
|
|
|
|||||
|
Direct operating expenses
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Equity in earnings of equity method investments
|
|
|
||||||||||||||||||
|
Interest income
|
|
|
||||||||||||||||||
|
Interest expense
|
(
|
)
|
||||||||||||||||||
|
Miscellaneous expense, net
|
(a)
|
(
|
)
|
|||||||||||||||||
|
Loss from operations before income taxes
|
$
|
(
|
)
|
|||||||||||||||||
|
Reconciliation of operating income (loss) to adjusted operating income (loss):
|
||||||||||||||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
|
Add back:
|
||||||||||||||||||||
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Other purchase accounting adjustments
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||
|
Adjusted operating income (loss)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||||
|
|
|
|||||||||||||||||||
|
Other information:
|
||||||||||||||||||||
|
Capital expenditures
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
—
|
|
$
|
|
|
|||||
|
Year ended June 30, 2018
|
||||||||||||||||||||
|
Entertainment
|
Tao Group Hospitality
|
Purchase accounting adjustments
|
Inter-segment eliminations
|
Total
|
||||||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
—
|
|
$
|
(
|
)
|
$
|
|
|
|||||
|
Direct operating expenses
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
—
|
|
|
|
||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
—
|
|
$
|
(
|
)
|
|||||
|
Loss in equity method investments
|
(
|
)
|
||||||||||||||||||
|
Interest income
|
|
|
||||||||||||||||||
|
Interest expense
|
(
|
)
|
||||||||||||||||||
|
Miscellaneous expense, net
|
(a)
|
(
|
)
|
|||||||||||||||||
|
Loss from operations before income taxes
|
$
|
(
|
)
|
|||||||||||||||||
|
Reconciliation of operating income (loss) to adjusted operating income (loss):
|
||||||||||||||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
|||||
|
Add back:
|
||||||||||||||||||||
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Other purchase accounting adjustments
|
—
|
|
—
|
|
|
|
—
|
|
|
|
||||||||||
|
Adjusted operating income
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||
|
Other information:
|
||||||||||||||||||||
|
Capital expenditures
|
(b)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
—
|
|
$
|
|
|
||||
|
(a)
|
Miscellaneous income (expense), net includes the followings:
|
|
Years Ended June 30,
|
||||||||||||
|
2020
|
2019
|
2018
|
||||||||||
|
Realized / unrealized gain (loss) on equity investments with readily determinable fair value
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|||
|
Non-service cost components of net periodic pension and postretirement benefit costs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Dividend income from equity investments
|
|
|
|
|
|
|
||||||
|
Loss on extinguishment of debt associated with Tao Group Hospitality
|
|
|
(
|
)
|
|
|
||||||
|
Measurement alternative adjustments for equity investments without readily determinable fair value
|
(
|
)
|
|
|
(
|
)
|
||||||
|
Others, net, primarily reflects the impact of Tao Group Hospitality three-month lag elimination in Fiscal Year 2020.
|
|
|
(
|
)
|
|
|
||||||
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
(b)
|
Entertainment’s capital expenditures for the year June 30, 2018 included a purchase of land in London for the Company’s planned MSG Spheres in London.
|
|
June 30,
|
|||||
|
|
2020
|
2019
|
|||
|
Customer A
|
|
%
|
|
%
|
|
|
(a)
|
A receivable from Customer A as of June 30, 2019 is primarily due to timing of cash receipts.
|
|
|
Three Months Ended
|
Year ended June 30, 2020
|
|||||||||||||||||
|
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
|||||||||||||||
|
2019
|
2019
|
2020
|
2020
|
||||||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Operating expenses
|
|
|
|
|
|
|
(
|
)
|
|
|
|||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
||||
|
Basic earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
||||
|
Diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
||||
|
|
Three Months Ended
|
Year ended June 30, 2019
|
|||||||||||||||||
|
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
|||||||||||||||
|
2018
|
2018
|
2019
|
2019
|
||||||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Basic and diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
|
Three Months Ended
|
Year ended June 30, 2020
|
|||||||||||||
|
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
|||||||||||
|
2019
|
2019
|
2020
|
2020
|
||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
|
|
N/A
|
N/A
|
||||
|
Operating expenses
|
|
|
|
|
|
|
N/A
|
N/A
|
|||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
N/A
|
N/A
|
||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
N/A
|
N/A
|
||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
N/A
|
N/A
|
||||
|
Basic and diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
|
$
|
|
|
|
$
|
(
|
)
|
|
N/A
|
|
N/A
|
|
|
Three Months Ended
|
Year ended June 30, 2019
|
|||||||||||||||||
|
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
|||||||||||||||
|
2018
|
2018
|
2019
|
2019
|
||||||||||||||||
|
Revenues
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
||||
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Operating income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Basic and diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||